TFM Sunrise Update 12-5-19


Corn futures remained flat overnight and with yesterday’s poor technical close and a lack of news, prices may drift lower again today. The 21-day moving average was triggered three days in a row, and prices failed to close above this level, suggesting either short covering or an appetite to buy on an up-move. Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 900,000 tons.


Soybean futures were two-sided overnight with 6 cent trading ranges posted. Prices rebounded yesterday and closed higher for the second consecutive session. We view this as little more than a bounce, as South American weather remains adequate, and the U.S. dollar against the Brazilian real continues to be a concern. Yet, the dollar has finished lower four days in a row, and this may provide some underlying support. Trade estimates for this morning’s USDA Weekly Export Sales are 700,000 to 1.30 mil tons. Meanwhile, news about the trade talks with China won’t go away, but the market seems to be tiring of the back and forth rhetoric.


Wheat futures were unchanged overnight. A weaker U.S. dollar, which has lost nearly 1% over the last four sessions offers outside-market support. Dry weather in Australia continues to surface, as does concern that the western Plains in the U.S. remain too dry. Parts of Northern Ukraine are in the same boat. Trade estimates for this morning’s USDA Weekly Export Sales are 300,000 to 700,000 tons. News that Iraq plans to import 750,000 tons of wheat in 2020 is a signal that global demand is there.


Cattle futures are called steady to weaker after yesterday’s weaker futures trade. Softer cutout values were noted as well, with choice losing over 2.00 and select over 50 cents. Futures are already holding a premium to the cash market which may further weigh on the market near-term.


Hog futures are called mixed to higher, as traders may buy hogs and sell cattle, unwinding spreads. Big daily slaughters continue to be a problem, though. In addition, though rising from oversold levels, hogs may feel the drag from the cattle market should those contracts continue lower.


Lisa Heder

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