TFM Sunrise Update 9-27-19



Corn futures traded weaker overnight, losing 1-1/2 cents and trading basically unchanged for the week as U.S. farmers delay making any 2019 corn sales hoping for a friendly October USDA report. Prices are likely remain stagnant into the weekend and in front of Monday’s Quarterly Stocks and Grain report. The pre-report estimate has projected quarterly stocks ending August 31 at just over 2.4 billion bushels. Dec corn, at 3.70 remains situated between the contract’s 20-day moving average support and the 40-day MA resistance.


Soybean futures were down 2 to 4 cents overnight with Nov at 8.86-1/2 trending along the contract’s 100-day moving average. The U.S. Midwest weather forecast has models differing between the GFS and European;
the GFS with upper 20’s, mid 30’s for the Dakotas, western Minnesota, and northwest Iowa next mid week, the European has no threat—rain chances also are mixed between the two. Continued talk of increased China buying in front of October talks is viewed as supportive. As for the bean bears, current fundamentals suggest prices may be too high going into US harvest and 2020 South America crop weather. A trade deal could help soybeans but does not offset potential for higher 2020 South America crops and lower China demand due to ASF. Quarterly stocks are estimated at 982 million based off of the average estimate of analysts.


Winter wheat futures continued to rebound overnight, gaining 2 to 3 cents while getting a boost from expectations of increased world demand, as well as continued concerns that spring wheat quality and quantity may be limited due to weather. Euronext wheat rallied on Thursday to its highest in almost six weeks as fresh weakness in the euro and a continuing run of import tenders boosted export prospects.


Cattle futures are called steady to higher. However, the market looked somewhat tired yesterday after a strong recovery over the last three weeks. Choice cuts at 213.51 may limit upside potential as well. On Thursday, a few cattle traded live at $104/cwt or a dollar higher than last week but most sellers are holding for higher money. In the south most sellers were firmly priced at $105.


Hog futures are called mixed. Oct is still likely too high at 64.22 as compared to the cash index nearly 10.00 lower. Dec hogs lost 1.00 yesterday, closing at 70.37 and for the second consecutive session ran into overhead resistance at the 100-day moving average. This could create hedge pressure especially with Dec holding a premium to the index of over 15.00.


Carol Tillmann

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