TFM Sunrise Update 11-6-19


Corn futures were up a penny overnight as the Dec contract plots a course along the contract’s 40-day moving average at 3.83. Harvest pressure continues to weigh on market sentiment and with this year’s prolonged season, a recovery is unlikely anytime soon, barring an unlikely favorable USDA report at the end of the week.  Monday’s weekly progress report showed only 52% of the corn crop harvested as of November 3rd which would leave 40 million acres still to be harvested. The average trade guess for yield is 167.2 bushels per acres compared to 168.4 bpa last month. Harvested acreage is estimated to be 81.3 mil versus 81.8 mil; and, ending stocks look to come in around 1.80 bil bu compared to 1.929 bil in October. We’ll get Weekly Ethanol Stats today, Exports tomorrow morning. In other markets, the revival in crude and a record setting stock market may create some money flow problems for commodities as investors look elsewhere to capitalize on their bets.


Soybean futures were unchanged overnight and have been searching for direction after last week’s turn higher on weekly charts, and strength in the product section of either meal or oil may help provide the short-term direction. A close eye will be kept on news wires regarding a potential Phase 1 deal between the U.S. and China, and with U.S. beans moving into a key export demand window, the market will be very closely observing any increase of potential sales. The average trade estimate for yield in Friday’s Supply/Demand report is 46.6 bpa compared to 46.9 bpa the month before; harvested acreage -75.5 mil versus 75.6; and, ending stocks are estimated at 432 mil bu compared to 460 mil in October. For now, November beans, at 9.22 are finding a home along the contract’s downward sloping 10-day moving average.


Wheat futures were firm overnight in the December contracts at all 3 exchanges. Chicago wheat was up 2-3/4 to 5.18. KC up 1-1/2 cents to 4.30 and Mpls up 1/4 cent to 5.26-1/4. A strong close in Chi contracts as prices are trying to push out of the consolidation pattern offers a potential upside move as the Dec contract looked to challenge overhead resistance near the 5.30 level. The overall winter wheat crop seems to be caught up on planting pace and is in good condition, which could be burdensome to price, but firming global prices as well as concerns on global supply will help to buoy the market overall.


Cattle futures are called mixed. Prices are in overbought condition, but strength in retail values may bring some optimism regarding potential cash trade later this week. Current cash values are undeveloped as of Tuesday, and will likely develop later on as the week matures. The last month has seen sales volume almost double. We will get the on-line cattle auction at 10 AM CDT, today. In the short term, futures prices may stay choppy after pausing from a strong push higher.


Hog futures are called steady to firmer. A strong move in retail values to start the week provided some short-covering rally on Tuesday’s session. Prices failed to push through some key moving average resistance, but if retail value strength can continue, prices have the opportunity to work higher on some additional short covering. More buying should materialize on positive developments regarding the U.S./China trade negotiations.


Carol Tillmann

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