TFM Sunrise Update 9-16-2019


Corn futures were narrowly mixed overnight including a new 2-week high price in the December contract of 3.72-1/2. Prices could easily move higher as we believe that it will take good weather well into the first or even second week of October to make a full crop. Last week’s weekly bullish key reversal on a less than friendly USDA report may be signaling to the market that the trade is looking beyond the September report and perhaps toward a crop that could be shortened. We’ll get Weekly Crop Ratings this afternoon, Export Inspections this morning. But, also important is spillover support from a steep hike in crude. Oil posted its biggest ever intra-day jump, briefly surging above $71 a barrel after a strike on a Saudi Arabian oil facility removed about 5% of global supplies and raised the specter of more destabilization in the region, according to Bloomberg.


Bean futures were also two-sided overnight, first trading as much as 6 higher to their highest levels since the end of July. Nov peaked at 9.04-3/4, but was down 4 to 8.94-3/4 this morning. The market had a very impressive upturn last week which futures gained nearly 40 cents as China re-enters the U.S. bean market. The U.S. Soybean Export Council, last week announced upwards of 15 cargoes being shipped out of the Pacific Northwest with talk of another 1.0 to 3.0 mil tonnes possibly to be booked. Less than ideal weather and short covering could be factors this week. Harvest will be kicking into gear as well and the market may find direction on yield results.


Wheat futures were mostly flat overnight. Prices limped into the end of last week, but nonetheless still had a solid up week. A drop in the dollar late on Friday, after a reversal downward on Thursday, could be viewed as supportive. However, prices are slightly overbought, technically and record world wheat supplies, according the Sept USDA report, may help weigh further rally potential this week.


Cattle futures are called steady to firmer. Prices basically consolidated on Thursday and Friday. However, there was positive news on Friday when packers added to their inventories by paying another dollar for cattle in all regions. For many, it felt like a winning week after early week expectations were for cattle to sell in the mid 90s. Friday’s Commitment of Traders report indicated record short positions as of Tuesday, which may in part explain the strong upsurge in prices at mid-week. Funds are net short cattle.


Hog futures are called higher on continued technical strength on the heels of fundamental support from export activity expected to develop from China, along with the recent purchases by China.


Kelly Rubisch

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