TFM Sunrise Update - May 29, 2020


Corn futures were up a penny overnight after climbing to a better-than-one month high on Thursday after weeks of sideways action. The 2% gain was led by short covering as prices managed to muster some technical strength in staying above 10 and 20-day moving average resistance lines all week. Dec corn is at 3.41-1/4 is now above the contract's 40-day MA for the first time since the end of January. The improved technical picture could likely bring some additional follow through today with Weekly Export Sales data on tap for this morning. In addition, trade focus will center on long range weather forecasts and the potential high pressure ridge developing in the west. Trade estimates for exports are 500,000 to 1.0 mil tons for old crop; And, 50,000 to 300,000 tons for new crop. Meanwhile crude has leveled off after rebounding and the dollar has fallen to a 2-1/2 month low.


Soybean futures are called mixed after trading 2 lower overnight as the trade exhibits caution ahead of a scheduled press conference for President Trump today regarding U.S./China relations. Trade tensions remain present and the market has maintained a defensive posture on doubts China will purchase more U.S. soybeans. Prices recovered off morning lows on Thursday with the support of other grains and may find more outside market help moving forward. Weekly export sales will be a key for price direction this morning. Trade estimates are 400,000 to 900,000 tons for old crop; And, 200,000 to 500,000 tons for new crop.


Wheat futures were firm overnight on a hot, dry forecast for the Southwestern states as the wheat market looks to finish out the winter wheat crop. Western Europe remains dry and the European Commission has lowered their production forecast 3-1/2%. However, global competition and overall global wheat supplies are still limiting factors for rallies even with a downturn in the dollar. Technically, Chicago contracts are trading 15 cents beneath their 200-day moving averages. KC wheat contracts are at their respective 200-day MA's. Trade estimates for Weekly export sales are 50,000 to 300,000 tons for old crop; And, 100,000 to 300,000 tons for new crop.


Live cattle futures are called steady to higher. June cattle futures closed higher each of the past three trading sessions, opening the door for additional money flow into the cattle market. The contract settled at 101.47, the highest close since March 5. The gap between futures and cash is closing but has a long way to go. Cash trade is mostly completed for the week, with overall trade fairly steady with last week.


Lean hog futures are called mixed to lower after the rug got pulled out from an early-week price bounce. Weakness in retail values and cash markets keep selling pressure over the front month contracts which suffered sharp losses yesterday. As hog slaughter continues to pick up strength, large supplies of heavy weight hogs have been a burden on the nearby market. In addition, lingering concerns regarding U.S. and China relations have weighed on the market, limiting any near-term potential rallies.