TFM Sunrise Update 2-7-2020


Corn futures were up a penny and a half overnight. For the week, Mar corn is mid-range and about unchanged after trading a 7-1/2 cent range between 3.76 and 3.83-1/2. The downside at current price levels seems limited, but technical resistance has held strong the past couple of weeks. Strength in the U.S. dollar, which is making another new high this morning, should also limit advances, but corn is still cheap.


Soybean futures are steady this morning, bean oil off slightly and meal firm. Soybean markets have had a tough time breaking through the 10-day moving average resistance level for the past few sessions, which could bring a pullback into the end of the week. Price action will be relatively quiet ahead of Tuesday’s Supply and Demand report. USDA has raised Brazil’s 2019-20 soybean production forecast by 1 million tons to 124.5 which compares to 116 mil tons for 2018-19. A shift toward drier conditions there should help growers make up some ground on harvest delays.


Wheat futures were down a penny overnight in Chicago after failing to extend a four day winning streak on Thursday. The wheat markets have held nearby support levels with serious determination lately amid dwindling exportable supplies across the globe, but the U.S. dollar rally has kept gains capped. Be wary of breaks of support, as speculators are currently holding a record long position in the market.


Cattle futures are called lower. Beef trends this week have not done any favors for the cash markets. Without cash strength, we do not feel there are enough supportive fundamentals to attract fund buying. Futures are oversold, so we could see a bounce on a jump in beef values, but the increase in production in quarter two should limit advances. notes, in a pattern similar to the trade wars, the market is moving up and down based on the last news cycle. Automated bots are picking up news about Coronavirus and triggering buy/sell orders in the futures markets. Cash bids of $120 surfaced in all areas. Most asking prices at $123 after Wednesday’s sell off in the cattle futures market.


Hog futures are called higher. With global optimism regarding coronavirus containment, as well as China’s willingness to work with the U.S. on ag purchases, hogs could continue their bounce from limit higher closes yesterday. Technically, hog markets are still oversold, and speculators should be able to move hogs higher to begin filling overhead gaps left on the charts during the recent price plunge.


Lisa Heder

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