TFM Sunrise Update - April 1, 2020


Corn futures were down 2 to 3 cents overnight after closing above their lows on Tuesday. Front month contracts held recent lows on USDA saying supplies are tighter than expected, and are building a potential double bottom, but new crop Dec made a new contract low of 3.53-1/4 yesterday on the heels of USDA Grain Stocks report showing projections for 97 million acres of corn to be planted for the next marketing year. This will keep fundamental pressure on the market seeing as how we won't get an acreage update until the end of June from the agency. Today we will have Weekly Ethanol Stats, and Export Sales tomorrow.


Soybean futures (May) were able to finish higher for a third day in a row on Tuesday after shrugging off early weakness. However, prices were down more than 10 cents overnight in beans, $3 per ton in meal and 50 cents in soy oil. USDA Planting intentions was favorable at 83.5 million acres for the 2020/21 marketing year, but bean prices are having trouble breaking free of their downward trending moving averages and nearby resistance formed at the top of recent daily trading ranges. Look for more range trading today as indicated overnight. The Grain Stocks report was in line with expectations, and the soybean market needs to see new strength in demand to move prices higher in the short term. Soybean product markets will be key, and could lead potential underlying support in soybean prices.


Wheat futures traded lower overnight with Chi down 7 cents in the nearby May contract, 4 to 5 across the rest of the board. KC contracts were off a nickel, Mpls 3 to 4 lower. USDA Grain Stocks were 25 million bushels below expectations and down 180 million from last year. This was reflective of last season's demand for U.S. wheat. Global wheat prices remain firm and bring some general support to wheat prices that were able to close the month and quarter out on a positive note as stockpiling occurs during the Covid19 pandemic.


Live cattle futures called mixed ahead of the last trading day for April options on Friday. Cattle futures saw limit up trade on front months as the market saw some short covering and profit taking going into the end of the first quarter. The direction for the rest of the week will be the cash market, which is trading at a premium to futures, but undeveloped so far this week. Softening retail prices are seen limiting gains.


Lean hog futures called steady to lower. Hog futures saw mixed trade in Tuesdays session. Summer contracts experienced short covering and profit taking, while the general heavy supply of market hogs weighed on the nearby April contract. This market has seen strong emotional selling pressure recently, and Tuesdays uneven close could spark some additional short covering.