TFM Sunrise Update - March 30, 2020


Corn futures are called mixed to lower. Prices were mostly steady overnight as the market awaits tomorrow's key USDA Prospective Plantings and Supply/Demand reports. Projected acres for the 2020/21 marketing year are seen ranging from 94 to 95 million acres which may be baked into the current softer market. Meanwhile, demand concerns weigh heavily on the corn market with the reduction in ethanol production. We will get Weekly Export Inspections mid-morning today. Outside markets are also stable with the stock index futures flat to weaker, crude down 22 cents and the dollar firm.


The soy complex was higher overnight featuring a new 2-1/2 week high in soy oil. Front month soybean futures consolidated throughout last week but still finished 19 to 20 cents higher. The contract was up a dime overnight. Traders will be watching for any additional headlines regarding Argentina and Brazil and possible logistics issue due to outbreak of COVID-19, which could mean more potential demand for U.S. soybeans and soybean meal. Weather-wise, dryness remains in southern Brazil where reports of damage have occurred. Scattered showers in central/southern Argentina are seen benefitting filling soybeans, but stressing areas that are missed. The average of analysts 2020/21 U.S. soybean acreage estimates are 84.86 million.


Wheat futures were up 7 to 8 cents in Chi and KC overnight, 3 in Mpls. Prices consolidated through the end of last week but still held gains of 15 to 30 cents. Prospects of improved demand due to global issues with COVID-19 and logistics keep wheat prices supported. May Chi wheat begins the week near 5.80 with an upside target at the January 22 high of 5.90-3/4. May KC wheat, at 4.93-1/2 has a double top target from mid-January at 5.11-3/4. The average of analysts all-wheat acreage is 44.982 million.


Live cattle futures called steady to lower. April cattle futures traded limit down on profit taking in Fridays session and cash prices likely peaking for now. A weak close opened the door for additional long liquidation, and retail prices fell from recent highs last week. The futures market is at a big discount to cash markets, which may limit selling pressure as the market processes the disconnect between futures and cash. A historically large marketing number and a historically small placement number sharply reducing the number of cattle on feed are key takeaways as this month comes to close.


Lean hog futures called mixed to lower. The quarterly Hogs and Pigs report confirmed a large amount of hogs available with all hogs at 104.3% of last year, and hogs for marketing at 104%, reflecting heavy supply through the spring and summer. Friday, summer hogs finished with new contract lows. A weak technical picture will likely bring follow through selling today.