TFM Sunrise Update 9-30-19



Corn futures traded a narrow 2 cent range overnight in front of today’s Grain Stocks report where the average estimate is projecting 2.43 billion bushels of grain at the end of the marketing year. In the September report, 2.445 bil bu was projected. After grain stocks numbers, the market will shift its eyes to weather and progress pace as we move further into harvest. There is the potential for some damaging cold over northern areas later next week. Friday’s Commitment of Traders report had funds net short 160,000 corn contracts versus 171,000 the previous week.


Soybean futures rose 9 cents overnight, but remain in a sideways trading range heading into today’s USDA report. Weather is seen as problematic with this year’s projected bean crop already being adjusted lower. A cold, wet forecast this week will impact the northern states, but could dip down as far as Nebraska. Any further cuts could tighten the overall supply picture with short-term demand from China improving. Traders are expecting the bean stockpile to be at 982 million bushels, more than double last year’s total at this time. Friday’s Commitment of Traders report had funds net short 41,000 soybean contracts versus 48,000 the previous week.


Wheat futures were firm overnight with winter wheat varieties up 2 to 3 cents. The grain stocks number today will give a clearer projection of demand in the first quarter, as the estimated stockpile should be approximately 80 million bushels under last year’s total. Weather across the northern plains will be in focus as we try to wrap up spring wheat harvest which has been delayed, and dealing with quality issues due to excessive wetness. Spring wheat was up 6-1/2 cents overnight. Friday’s Commitment of Traders report had funds net short 18,000 SRW wheat contracts versus 12,000 the previous week; Net short 36,000 HRW vs 38,000; and, 20,000 HRS vs 23,000.


Cattle futures are called mixed to firmer. Cattle futures have had an impressive uptrend over the past couple of weeks, and as late afternoon cash trade on Friday improved topping out at $106-$107 in NE and CO, will likely bring some additional short covering in today’s session as managed money is holding a short position of approximately 5,500 contracts.


Hog futures are called mixed to lower. Front month Oct hogs are seeing an improvement in cash prices, which could bring support, but quarterly hogs and pigs numbers stayed relatively heavy with the June through August pig crop 3% above last year and hogs weighing 120 pounds and over running 5%-6% above last year. The pig crop is at its largest estimate since 1988.


Carol Tillmann

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