TFM Sunrise Update 11-7-19


Corn futures were steady overnight after experiencing a technical breakdown in Wednesday’s trade. The poor showing yesterday and defensive posturing in front of Friday’s Supply and Demand report is highlighted by this year’s prolonged harvest exerting some pressure. The bearish tilt in corn has the market technically oversold which would support a rebound if reversal action occurs. Dec corn is now trading just south of the 3.80 price level for the first time in almost a month. Trade estimates for this morning’s USDA Weekly Export Sales are 300,000 to 650,000 tons.


Soybean futures inched upward overnight, posting gains of 2 to 3 cents. Good demand provides underlying support as does some adverse weather for the northern Corn Belt where growers have faced difficulty in getting beans harvested. Trade estimates for this morning’s USDA Weekly Export Sales are  600,000 to 1.20 mil tons. Meanwhile, Newswires report that Beijing and Washington have agreed to remove existing tariffs in tranches, China’s Commerce Ministry said Thursday. “This is what [the two sides] agreed on following careful and constructive negotiations over the past two weeks,” ministry spokesman Gao Feng said at a routine briefing. If a phase-one deal is signed, China and the U.S. should remove the tariffs at the same time and by the same amount, Mr. Gao said, adding that it was an important condition for a deal. He didn’t give any information on when and where a deal could be signed. “The trade war started with increasing tariffs and should end in removing all tariffs,” Mr. Gao said. Removing all existing tariffs has always been Beijing’s bottom line to reach a trade deal with Washington. The U.S. has for months balked at scrapping all tariffs, aiming to keep at least some in place as a way to pressure China.


Wheat futures closed mostly unchanged yesterday and were narrowly mixed overnight with Dec Cbot wheat up 2-1/2 cents and KC mostly steady. Prices continue to find support on expectations that world supply/demand numbers could be reduced in Friday’s report. Egypt’s latest tender to secure 175,000 tons of French and Russian wheat usually gives the market some underlying boost. Trade estimates for this morning’s USDA Weekly Export Sales are 350,000 to 600,000 tons.


Cattle futures are called steady. Prices have sagged since putting in new highs for the move to start the week but managed to come together late in Wednesday’s session finishing well off their lows. The Goldman Roll is expected to start tomorrow but many believe that not all of the entry of new longs into the second month contract are speculative longs. Some commercial longs are entering the market. Open interest is rising. Steady to higher cash is expected this week with higher cutout values noted. Cattle owners are pricing most cattle from $119-120. Packers have been reluctant buyers unless cattle are priced with last week’s prices.


Hog futures are called mixed. Volatility is the keyword that provides for trading opportunities but not much price direction of consistency, particularly in the actively traded nearby Dec contract. Traders pushed prices into an outside day event in yesterday’s trade and the market is expected to continue to sway back and forth as trade talks with China continue to heighten expectations for increased demand. Both bulls and bears have good arguments. We continue to believe daily slaughters are too big.


Carol Tillmann

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates