TFM Sunrise Update 2-20-20


Corn futures were in the red again overnight, pressured along with a basket of commodities from new highs in the dollar. In addition, concerns regarding 2020/2021 acreage projections in Friday’s USDA outlook forum keep bullish corn traders on the sidelines, as prices will likely stay range bound and choppy through the end of the week. Corn was off only a penny overnight while continuing to respect those trading ranges. Weekly Export Sales are pushed back until tomorrow due to the government holiday on Monday of this week.


Soybean futures were down 3-1/2 cents overnight and are building a pattern of lower daily highs on the chart for the fourth consecutive day, potentially. Options expiration may bring volatility to front month Mar beans, but rallies will stay limited versus Brazilian competition where there are currently no major weather issues, though Argentina remains dry though the end of next week. Meanwhile, traders continue to debate whether or not China will aggressively buy U.S. soybeans this year.


Wheat futures were down 4 cents overnight amid a stronger dollar and second guessing over China’s intent to be a strong buyer of U.S. wheat. Wednesday’s price action was consolidation after an aggressive trade higher on Tuesday’s session. The market is looking for direction with multiple headlines pointing different ways. It will come down to fundamentals and available supply of exportable wheat.


Cattle futures are called mixed. Cattle futures will likely stay choppy moving toward Friday’s cattle on feed numbers, which are expected to show cattle inventory and feedlots 102% above last year’s levels. Cash trade is still relatively undeveloped this week. Technically, the futures market favors momentum to the upside which could support a move higher if resistance levels are penetrated.


Hog futures are called flat to firmer after trading sharply higher yesterday. The buying pushed April hogs to the highest level since Jan 29 and nearly filled the gap left from Jan 30. This has turned momentum studies from mid-range to higher which, like cattle, should support a move higher if resistance levels are penetrated. Strength in Chinese pork prices, as well as money flow into the hog market also provides potential upward price movement. U.S. supply remains heavy warrant some caution toward any kind of major rally, though.


Lisa Heder

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