TFM Sunrise Update 7-27-20


Corn futures traded two-sided overnight, mid-range of last week’s sideways 10 cent trading ranges.  Weekend weather provides little direction for the market today and, overall, weather is not a concern and the majority of the U.S. corn crop that is in good shape.  The Midwest forecast sees a cold front working through the SouthEast two-thirds of the Midwest in the next 36-48 hours and will bring moderate rain amounts with good coverage; things then look to quiet down.  The 6-10 day forecast for this time frame for the Midwest sees fairly limited rains for most of the region any rainfall is seen for northern sections of the Midwest and the Ohio River Valley; temps are seen running near average.  The 11-16 day outlook for the Midwest calls for average to a bit below average rainfall for the Midwest, with temps to run average early and a bit below late.  The dollar continues to implode this morning offering a key source of outside-market support from a global marketing perspective.  Technical trends remain softer following a third consecutive week of lower corn prices.  We’ll get weekly Export Inspections and Crop Ratings today as the month July comes to an end this week.  Friday’s Commitment of Traders report showed Managed Money net short 137,000 corn contracts as of last Tuesday.  Heading into today, they are estimated to be net short 125,000.


Soybean futures also traded both sides of Friday’s settlement prices overnight.  Strong demand continues to buoy the market after USDA announced daily export sales each of the past nine days and U.S. new crop exports sales are at multi-year highs while exceeding 7 mil metric tons at this point.  The overall trend is higher, but prices are struggling with resistance at the $9.00.  Meal was up 1.60/ton overnight and soyoil traded lower.  Friday’s Commitment of Traders report showed Managed Money net long 75,800 soybean contracts as of last Tuesday.   As of today, they are estimated to be net long 88,000 beans, net short 23,000 lots of meal; and, net long 36,000 oil.


Wheat futures were lower overnight despite another plunge in the greenback overnight.  Chicago futures lost 4 to 6 cents before finding support along the upward trend of higher daily lows on the charts.  KC wheat was down 4, and MPLS, 2 to 3.   The lower U.S. dollar, rumors of Chinese interest in U.S. wheat, and firm global prices provide underlying support in wheat prices.  The  technical picture could attract additional short covering and buying.


Live cattle futures are called steady to lower.  July Cattle on Feed report brought no surprises with the number being: total Cattle of Feed at 100%, Placements at 102.1% and marketings at 101.3% of last year.  The market will shift back to cash market, which has be trending higher.  Speculative funds have been building a long position, just shy of 30,000 contracts.


Lean hog futures are called steady to higher.  August hog futures finished the week up $1.20 and higher for the fourth consecutive week.  Oct was down 92 cents and Dec closed down 35 cents.  The technical trend is higher and retail values/export demand has been supportive.  Cumulative sales for 2020 have reached  1,355,400 tonnes, up 38.5% from last years pace.  Large supplies of slaughter hogs limit rallies.



Matthew Strelow

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