TFM Sunrise Update 12-18-19


Corn futures eased overnight in a mid-week consolidation move. Prices are running into some key resistance levels, but short-covering is still a major force in the corn market. If the Mar contract, now at 3.88-1/2 can push to the 100-day moving average at 3.90, prices will likely trend higher to possibly challenge the October highs. The contract’s 200-day moving average is at 4.07. Demand news is turning more favorable, as the U.S. looks to be the main export supplier on the global scale in this window. Weekly Ethanol Stats will be out today, Exports tomorrow morning.


Soybean futures were down 1 to 2 cents overnight after managing to close higher the past four days. Like corn, short-covering in the midst of an improved technical picture and a more friendly trade relationship with China supports the prospects of a better demand picture for U.S. bean markets. The market is still cautious of favorable weather conditions in South America and the idea of a large supply coming at us later this winter. In the short term, prices look to challenge key resistance levels higher in the price range.


Wheat futures traded lower overnight with Chi contracts down 6, KC down 4 and Mpls down 1/2. The technical picture has improved though, as managed money flows into the wheat market while growing a small long position. Overall, futures are poised to a technical breakout and may look to challenge the June 2019 highs. Improved weather forecasts across the southern Plains and a technical bounce in the dollar may limit some short-term upward movement, but global wheat prices offer underlying support.


Cattle futures are called mixed. After a strong start to the week, cattle prices are seeing some profit-taking as we move towards this month’s Cattle on Feed report on Friday. Retail demand was turning firmer, but carcass values moved softer in yesterday’s trade. The likely key will be the development of cash markets this week, currently, futures prices are running at a premium to last week’s cash.


Hog futures are called two-sided. Deferred contracts maintain their buying strength, as the prospects of tighter slaughter numbers in Q1 compared to Q4 promote some optimism. Improved U.S./Chinese trade relations open the door for additional purchases of U.S. pork to meet the Chinese market . . . those numbers won’t be revealed until Thursday’s Weekly Export Sales report. Front-month hogs are struggling with their premium to the Lean Hog Index, as the market is currently still digesting large production numbers and overall pounds of pork here in the U.S.


Carol Tillmann

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