TFM Sunrise Update 9-26-19


Corn futures are narrowly mixed this morning with only a 2 cent trading range overnight. Weather forecasts are going to be closely watched with forecasts for heavy rain moving across the Midwest hampering an already delayed harvest. The U.S. Midwest weather forecast still has a chance of some upper 20’s and mid 30’s for the Dakotas, western Minnesota, and northwest Iowa going into mid next week but, the weather models turned less aggressive. Above average rains are still seen falling in the northwest half to two-thirds of the Midwest with average to below average rains in the southeast. Temps will be running above average over the next several days before falling at the end of next week. The current technical picture has improved as prices have been grinding higher., but a heavy supply picture keeps a lid on any significant rallies, at least until USDA releases their next round of data on Monday. The average estimate for quarterly corn stocks as of Sept 1 is 2.428 bil bu compared to 2.14 bil bu last year. USDA’s Sept estimate was 2.445 bil. Trade estimates for this morning’s USDA Weekly Export Sales are 600,000 to 1.10 mil tons.


Soybean futures gained 4 cents overnight, underpinned by improved Chinese demand. Weather forecasts will be closely monitored in the short term as well as President Trump’s account of trade with China which has been two-sided so far this week. China’s bean meal imports for Aug eclipsed year-ago receipts, but so has Brazil’s exports to China for that month. Monday’s Grain Stocks report could be key to further price movement. News wires report China will buy about 6.0 mt of U.S. soybeans ahead of trade talks. The average trade estimate for Quarterly Stocks is 982 mil bu versus 438 mil last year. The Sept forecast had stocks at 1.005 bil bu. Trade estimates for this morning’s USDA Weekly Export Sales are 800,000 to 1.30 mil tons.


Wheat futures rebounded overnight after trading lower 3 out of the last 4 session. Winter wheat was up 6 to 7 cents, Mpls up 4. Mpls spring wheat will likely stay supported as forecasts for wet weather across the northern Plains forges harvest delays and quality concerns in traders’ minds and the supply side of the equation gets tighter. Other wheat classes are struggling competitively on the global export front and will likely still be the bottom side of spread actions. Sept 1 wheat stocks are seen coming in near 2.319 bil bu versus 2.39 bil last year. Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 500,000 tons. As far as Egypt’s wheat tender, they bought 300,000 tons of supplies from Russia and France. Japan bought 122,000 tons of U.S. and Canadian wheat in a routine tender.


Cattle futures are called mixed to higher. Prospects of improved export demand, short-covering, and improved technical and fundamental activity provides additional support in the cattle markets. Cash trade is still relatively undeveloped this week and will likely give us some push one way or the other into the end of the week, and asking prices are trending firmer, supported by prospects of improved demand.


Hog futures are called steady to higher. A strong close in the Dec contract challenged our highest price point since July put the Dec hog charts at a crossroads. The quarterly Hogs and Pigs report on Friday will still likely show burdensome supplies of hogs readily available, but the prospect of improved Chinese demand, as well as steadily rising global pork prices keeps support under the deferred contracts.


Carol Tillmann

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