TFM360 Sunrise Update June 25, 2020


Corn futures traded weaker overnight with Dec down 1-3/4 cents to 3.32 amid a lack of market-friendly news. The contract low from May 21 sits at 3.25-1/2. The path of least resistance is lower for corn prices and speculative money remains heavily wagered on short side of the market to the tune of an estimated 291,000 corn contracts. July options expire tomorrow, adding to the negative volatility in the market. South American corn supplies for export currently cheaper than the U.S. supplies making rallies difficult. Trade estimates for this morning's USDA Weekly Export Sales are 300,000 to 800,000 tons for old crop, 100,000 to 300,000 tons for new crop. Weather-wise, things will be mainly dry across the Midwest region until rains arrive in the west early Friday and work into the rest of the region later Friday into Saturday; totals will be light to moderate with good coverage. The 6 to 10 day forecast has showers and thunderstorms firing up mostly in the northeast sections of the Midwest with moderate to good rainfall amounts.


Soybean futures were down 1 to 2 cents overnight. A lack of fresh export news and pressure from other grains weigh on beans. Soymeal was steady and soyoil weaker overnight. Chinese Ag futures were closed for holiday. Malaysian palm oil prices were down 49 ringgit at 2,387 (basis September) at mid-session as June exports slow and crude oil weakens. Look for prices to stay choppy, working towards next Tuesdays USDA planted acreage and grain stocks report. Weekly export sales need to stay strong to keep buying enthusiasm under the market. Expectations are for sales to be 800,000 mt to 1.90 MMT combined marketing years for last week. Meal sales are seen near 100,000 to 300,000 tons; And, oil at 5,000 to 30,000 tons.


Wheat futures were mostly steady overnight in keeping with the consolidation theme above recent lows. Kansas wheat quality is good as harvest continues; Harvest is at various states of completion; from almost finished in the southwest to barely started up north; but due to rain, wheat harvest is delayed for several days; forecasts call for scattered showers this week, but as temperatures remain high, many are hoping the crop will be dry enough for harvest. Big picture - global wheat supplies are heavy and weakness in global prices help keep the lid on U.S. values. Trade estimates for Weekly Export Sales are 250,000 to 650,000 tons.


Live and feeder cattle calls are mixed. The softer tone to the cash market and weak retail values kept cattle prices in check yesterday. Demand will be the key for cattle prices in the short term as restaurants strive to reopen from the Covid-19 shut downs and the industry works through large backed up slaughter supplies.


Lean hog futures are steady to lower, though two-sided trade is likely ahead of today's quarterly Hogs and Pigs report. Expectations are for total hogs to be 103.7 % of last year. Weekly average weights have been going down for more than a month. Overall, market-ready hogs remain plentiful, but the report should show a smaller supply into late this year and early next year. Cash prices stay soft, limiting any rallies.