News Source: SPC

Top Farmer Closing Commentary 10-25-2021

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CORN HIGHLIGHTS: Corn futures are unchanged in Dec and Mar while gaining 0-3/4 in Sep. Dec closed at 5.38. Export inspections at 21.5 mb were termed disappointing and at the low end of expectations. Support came from higher overnight corn trade in China as well as crude oil reaching new contract highs approaching 85.00. Heavy rains in parts of the Midwest will delay harvest and for some, it will be much more challenging as wet conditions with high winds have knocked weaker stalked plants to the ground.

Open interest has been climbing higher suggesting the trade is more interested in buying even as prices have been moving higher. On Friday’s Commitment of Traders report, funds are net long near 220,000 contracts, off slightly from a few weeks ago, but in line with where funds have been holding a long position since mid-summer. Basis is firming in areas and improving ethanol margins, and talk of feedlots securing inventory is viewed as a positive for price. Fertilizer and input logistics are concerning, yet time is on the side of the marketplace “getting it figured out.” However, markets often move on perception (emotion) and the perception is fewer acres in 2022. Economic concern in China may act as overhead resistance.

SOYBEAN HIGHLIGHTS: Soybean futures closed with double-digit gains as Nov futures lead today’s rally closing at 12.37-1/4. Higher overnight futures in China’s futures market (Dalian Exchange) and rain delays supported futures today, as did crude oil futures trading into new contract highs approaching 85.00. Export Inspections were termed supportive at 77.3 mb.

The most recent COT (Commitment of Traders report) indicated managed money at its lowest level this year with the net long position just under 20,000 contracts. Soybean oil finds support on tight world vegetable supplies, but soymeal remains near its lower price for the season. Expectations for record production out of South America seem to be keeping the market leery and unable to recover anything more than a bounce. Yet, as weather unfolds in Brazil and Argentina the market will respond. The bull argument is alive from a macro perspective, yet economic concerns with the world’s top importer (China) and some thoughts on yield and demand might be slanted negative on the November report keep prices in check. For the new crop, we will continue to make small sales even though harvest is 10 months away. World supplies are expected to increase in 2022.

WHEAT HIGHLIGHTS: Wheat futures closed higher, with carry-through momentum from Friday. Dec Chicago wheat gained 3-1/2 cents, closing at 7.59-1/2 and Jul up 6-3/4 at 7.63-1/4. Dec KC wheat gained 3-3/4 cents, closing at 7.77-3/4 and Jul up 3-3/4 at 7.65-3/4.

Wheat managed to settle in the green, albeit off today’s highs. This was perhaps in part due to the somewhat disappointing export inspections of only 5.2 mb today. The U.S. dollar is also firmer today, offering some resistance to wheat. Minneapolis remains the leader with Dec closing at 10.27, up 14 cents – Minneapolis being above the ten dollar mark has not occurred since 2012. This afternoon we will get the first U.S. crop ratings for winter wheat, which are expected to be high at around 65-70% good to excellent. Drought remains a concern in U.S. HRW crop areas, but the SRW areas have good soil moisture with more rains forecast for this week. In China, 900,000 mt of wheat from their reserves were auctioned off last week. Paris milling wheat futures continue to make new highs. Russian wheat prices continue to rally as they increase their export tax. U.S. weather will be something to keep an eye on as well – wet conditions may interrupt winter wheat plantings.

CATTLE HIGHLIGHTS: Cattle futures posted moderate to strong gains to start the week, as the market reacted to Friday’s friendly Cattle on Feed report. Oct cattle gained 0.925 to 125.025 and Dec cattle added 1.200 to 129.525. Feeder cattle finished with strong gains as well on the session with Oct adding 0.200 to 155.625, and Nov feeders added 1.575 to 158.475.

Prices popped on the open to start the session but failed to hold those beginning opening prices. The Cattle on Feed report on Friday brought some friendly surprises that triggered some short-covering and buying to start the day. After the open, price action was weak, as closes were towards the bottom of the range for the day. The biggest support in the COF report was the low placement number, coming in well below expectations, and that supported the feeder market and deferred cattle contracts. Total cattle on feed at 99% was within expectation, but the totals for heavy weight cattle on feed for 150+ days continue to stay heavy. Compared to last year, 150-day cattle were 14% higher. This is a reflection of the slow slaughter pace, which has led to a buildup of cattle. Heavier supplies keep the cash market in check, which is evident as we trade mostly steady the past few weeks. The cash market was a typical Monday with bids and asking prices undefined, as trade hold off until later in the week. The cash market will likely be the most limiting factor in the cattle market in the near term. Midday retail values were softer as choice carcasses lost 1.59 to 280.23 and select dropped 0.92 to 262.19. The load count was light/moderate at 77 loads. Demand concerns stay in the front of traders’ minds, and their possible impact on cash markets. Feeder cattle saw buying across the market fueled by the light placement numbers, but prices finished off afternoon highs after the initial market reaction. Stronger overall grain prices were also a limiting factor in the feeder market on Monday. Even after a friendly report, the cattle market seems to be looking for a direction. Oct live and feeder contracts expire this week, and that could keep the market choppy, but the cash market and retail market will still be the key for price direction.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed in an overall choppy market. Weak cash and retail tone limits the upside in the hog market. Dec hogs gained 0.875 to 74.200 and Feb hogs gained 0.150 to 76.775. The deferred contracts were weak during Monday’s trade.

Dec hogs consolidated above Friday’s range, as the premium of the cash index to the Dec futures likely supported the market. The overall cash market remains soft, but Dec hogs are supported by the 9.500 discount to the Cash Hog Index. The Cash Hog Index traded 1.13 lower on Monday to 83.70, trying to tighten the gap. The weak index reflects the soft overall cash market tone. The pork carcass cutout Index also traded softer, down 0.58 to 98.67, reflecting the tone in the retail pork values. At midday, the retail pork carcass prices are trying to get back above the $100 level and gained 2.24 to 100.51 on movement of 157 loads. That strength may be fleeting, as afternoon closes have had a difficult time holding midday gains. Concerns in longer-term demand will keep selling pressure in the market into the summer months, as overall global export demand is likely softening. The fundamentals have stayed very soft, and keep the sellers active in the market. The hog market may be starting the bottoming process with an oversold market and pork prices representing a good value, but the low is still likely ahead of the market overall.

Top Farmer Midday Update 10-25-2021

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CORN

  • Dec down 1 @ 5.37
  • Rains today in the eastern Corn Belt disrupting harvest
  • January corn on China’s Dalian exchange is around the equivalent of $10.29 per bushel
  • Ethanol profitability remains strong
  • Quality is a concern in North China where there have been heavy rains
  • Central Brazil received some heavy wind, rains, and hail

SOYBEANS

  • Nov up 11 @ 12.32
  • Despite rumors last week, there was a lack of sale announcements
  • November soybeans on China’s Dalian exchange are around the equivalent of $19.32 per bushel
  • Brazilian crop conditions remain favorable – likely record crop in 2022
  • Malaysian palm oil production should ramp up – their government reportedly is reopening the industry to foreign workers

WHEAT

  • Dec wheat up 5 @ 7.61, Dec KC up 3 @ 7.77, Dec MNPLS up 9 @ 10.22
  • In China 900,000 mt of wheat reserves were auctioned off
  • The US SRW crop has good soil moisture, with more rains coming this week
  • Drought remains a concern in HRW crop areas
  • MPLS wheat is above $10 for the first time since 2012
  • Paris milling wheat futures are making new highs again

CATTLE

  • Dec LC up 1.600 @ 129.925 & Apr FC up 1.875 @ 163.575
  • Cattle on Feed report was somewhat friendly
  • Oct 1 on feed numbers were 99%, placements at 97%, and marketings at 97%
  • Placements were significantly lower than the expected 101.4%
  • Choice cuts up 1.16 and select up 0.39
  • Cattle slaughter projected at 120K

HOGS

  • Feb hogs up 0.225 @ 76.850 & Feb pork cutout @ 90.500
  • Hog futures are oversold
  • December and February have gaps in the charts above current levels, which may be filled at some point
  • Packers can obtain hogs without much difficulty
  • National Direct Afternoon report increased 0.20
  • Hog slaughter projected at 476K
  • CME Lean Hog Index for 10/25: down 1.13 @ 83.70

TFM Sunrise Update October 25, 2021

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CORN

Corn futures were mixed overnight with a higher bias.  Dec corn edged out last week's highs, gaining as much as 4 cents to get to a 2-1/2 week high of 5.42.  The contract managed to finish 12-1/4 cents higher last week as prices approach the upper end of a roughly 50 cent range between 5.00 and 5.50 as stronger demand for corn in ethanol production in recent weeks, surging energy markets, and growers deal with concerns over high input costs for 2022.  Long position holders in corn does make the market susceptible for a washout at some point, though.  Crude is making a new high this morning, while the dollar stays rangebound of the last five trading sessions.  With the corn market now trading above it's 50-day moving average, the bulls have the edge to start the week.  The contract's 100-day moving average at 5.46-1/4 is an upside target.  Weekly Export Inspections are on tap for later this morning followed by harvest progress data after the close.  Harvest was expected to slow during the weekend as rain was forecast for large swaths of the Corn Belt.  Basis bids for corn shipped by barge to the U.S. Gulf Coast for export were flat to lower on Friday, continuing a recent slide fueled by rising supplies and sluggish demand from exporters, traders said.

SOYBEANS

The soy complex is higher this morning.  Nov beans are up 8 cents to 12.28-1/2, but off last night's high of 12.35-1/4 were the contract's 20-day moving average slowed last night's price rally.  Bean meal is up $2.00 per ton while forming a distinct bottom in that market; And, and soyoil is up .37.  After pushing beneath the $310/ton mark two weeks ago, the December soybean meal contract has been up six of its last seven trading sessions to close $10.80/ton higher last week alone.  Most technical indicators point to a further recovery from here as the market will attempt to avoid six straight months of lower trade this week.  Weather forecasts are mixed over the next couple weeks with a wetter forecast for the U.S. which may slow harvest a bit, but large chunks of Brazil are expected to get beneficial rain within that timeframe.  Chinese Jan bean futures were 25 yuan overnight; Soymeal up 18; Soyoil down 14; Palm oil down 20; Corn up 16.  Malaysian palm oil prices overnight were up 46 ringgit (+0.93%) at 4970  amid stronger edible oil prices, while investors fretted that supply shortages may stretch to next year.

WHEAT

Wheat futures made new highs overnight led by KC and MPLS contracts.  Chicago Dec futures rose 11 cents to 7.67 before trimming gains.  The contract ran into resistance around the 7.60 area, but now looks at the contract high of 7.86-1/2 as a rallying point.  Dec KC wheat advanced 7-1/2 cents to a new high of 7.81-1/2.  Dec MPLS rose 7-3/4 cents to a new high of 10.20-3/4.  Tighter stocks around the world keep a bid under the market.  Like oats and rapeseed there appears little selling near contract highs in MPLS contracts.  Spot basis bids for HRW wheat were firm at elevators that ship supplies by rail to exporters at the U.S. Gulf on Friday, with the market underpinned by strong overseas demand.  Russia's wheat export tax hit $67 with some estimates pointing to a test of $70 soon.

CATTLE

Cattle futures are called steady to higher.  Friday's Cattle on Feed numbers held some surprises that will likely impact the market this week.  Total Cattle on Feed as of Oct. 1 was at 99% of last year or approximately 11.550 million head.  This was slightly below average expectations and within the trading estimated range.  The Placements provided the positive surprise at 97% of last year versus expectations of 101.4% and below the range of expectations.  The low Placement number should be supportive for the open.  Marketings were in line with expectations at 97% of last year.  The cash market was very quiet to end the week at $124, running steady with the previous week.  The retail market seems to have found a bottom with the Choice cutout increasing $0.34 last week and Select increasing $2.04.  Higher quotes were noted towards the end of the week and the expectation is steady to higher asking prices for this week.  The low placement number on the COF report Friday should be supportive of Feeder cattle prices overall.   The price action was weak on Friday going into the end of the week, but the friendly Placement numbers should help provide some support next week.

HOGS

Hogs are called mixed following choppy action last week.  December hogs lost 4.950 during a difficult week and are looking to challenge the previous lows near the $72.00 price level.  Hog prices were volatile during the session, which could be an indicator that prices are starting the bottoming process at this point, but the fundamental will still be the key to turning the market.  Cash markets remain soft, pressuring the hog market.  Afternoon direct trade on Friday was mixed with Direct carcass based pricing .20 higher but Live pricing $1.92 lower, which will limit the market today.  The Lean Hog Index traded 1.06 lower to 84.83, and lost  3.99 for the week.  The index is trading at its lowest point since early March last spring.  The premium of the index to Dec hogs should help support the front of the market, trading at a 11.505 spread.  The retail pork carcass prices are trying to get back above the $100 level, were 4.10 higher on Friday afternoon, but lost those gains closing .01 lower to 98.27 on movement of 381 loads.  The fundamentals have stayed very soft, and keep sellers active in the market in an oversold market, thus pork prices represent a good value.

Top Farmer Closing Commentary 10-22-21

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CORN HIGHLIGHTS: Corn futures finished the day and week on a firm note, with December closing 5-3/4 higher for the session, closing at 5.38. For the week, December picked up 12-1/4 over last Friday. Sharply higher wheat prices, a lack farmer selling, strong ethanol and export demand as well as higher crude prices combined to provide support for prices this week.

Today’s close was encouraging. Yesterday, prices slumped into the close but snapped back today and even more impressive it is a Friday close. Traders are willing to buy into the weekend. With some additional rational for the risk off session yesterday, prices weakened on NOAA’s three-month forecast suggesting warmer than usual temperatures in the US. This was counter to La Nina talk of a colder winter. However, today’s recovery, especially in wheat continues to signal that end users are more aggressively covering needs. Because yield results appear to be generally better than expected, corn prices are likely to remain rangebound moving into the later stages of harvest. Attention will soon shift to South America weather, exports, and cost and availability of inputs. We are biased to believe, given the current concerns regarding herbicides, pesticides, and fertilizer a shift to more soybean acres is highly possible. If nothing else, the perception this will occur, will support prices for now.

SOYBEAN HIGHLIGHTS: Soybean futures ended both the day and week uneventfully, with November closing 3-1/2 cents lower at 12.20-1/4. For the week, Nov futures gained 2-3/4 cents. November 2022 gained 1-1/2 cents on the week, but lost 6 cents today, closing at 12.23-3/4. A huge export sales figure this week at over 100 mb was viewed as supportive and a possible turning point for exports signaling end users are more aggressively seeking inventory now that harvest is closing in on completion. Good planting progress in South America kept rally potential in check.

No matter how you slice it, current ag markets are dynamic and factoring several major factors at one time. Surging palm oil and energy prices with a favorable bio-energy environment keeps soybeans well supported. Yet, concern of more acreage in both hemispheres could trump demand as supplies could massively increase. US carryout has already doubled in the last 60 days on yield adjustments from a year ago and higher yield expectations this year. From a perceptive view, growing expectations for more soybean acres due to fertilizer input issues suggest downside risk for 2022 price. Yet, futures are holding together well hitting 12.50 this week and each of the last six months. Nonetheless hold at 30 hedged for 2022 and 20 cash sold.

WHEAT HIGHLIGHTS: Wheat futures traded sharply higher, driven by good demand and tight supply. Dec Chicago wheat gained 14-3/4 cents, closing at 7.56 and July up 9-3/4 at 7.56-1/2. Dec KC wheat gained 26-1/4 cents, closing at 7.74 and July up 14-1/2 at 7.62.

Wheat had a banner day with double digit gains across all three contracts. Minneapolis spring wheat finally managed to not only breach, but rather smash through the ten-dollar mark, with a close 27-3/4 cents higher at $10.13. This has not occurred since July of 2012. Yesterday’s long liquidation appears to be over, which allowed the wheat complex to stretch its legs today. Paris milling wheat futures made new contract highs as well. These rallies come despite total wheat commitments being down 20% from last year. Russian wheat prices have increased for 14 consecutive weeks, and by month end their wheat export tax is expected to be $70 per metric ton. European wheat exports are up 64% from last year, though this is not sustainable, and they will have to slow exports at some point. There has also been talk that Russia may implement a tax on or reduce fertilizer exports, which could impact the wheat crop just as much as corn. This week Japan was reported to have bought about 81,000 mt from the US and Canada, and Turkey bought 300,000 mt tons of wheat from other origins as well. Most wheat buyers in North Africa and the Middle East have low supply and need to buy.

CATTLE HIGHLIGHTS: Cattle futures lower with additional selling pressure on technical selling prior to Friday’s Cattle on Feed report. Oct cattle lost .875 to 124.100 and Dec cattle dropped 1.225 to 128.325.  Feeder cattle finished with strong losses on the session with October falling .825 to 155.425, and Nov. Feeders lost 2.175 to 156.900.  For the week, Dec Live cattle 2.650, and Nov Feeders fell 4.525.

The focus of the market today was the USDA Cattle on Feed Report to be release after the market close.  Price action stayed weak over on position squaring, as Dec cattle fell back to challenge prices supports.    Cattle on Feed numbers on Friday afternoon found some surprises that will likely impact the market next week.  Total Cattle on Feed as of Oct. 1 was at 99% of last year or approximately 11.550 million head.  This was slightly below average expectations and within the trading estimated range.  The Placements provided the positive surprise at 97% of last year versus expectations of 101.4% and below the range of expectations.  The low Placement number should be supportive of the market on Monday’s open.  Marketings were in line with expectations at 97% of last year. The cash market was very quiet to end the week as business looked wrapped up for the week. Like last week, $124 seemed to catch most trade, running steady with last week.  Midday retail values were firmer, as  Choice carcasses gained .98 to 281.64, and Select added .67 to 263.39, but that failed to support the market.  The load count was light/moderate at 54 loads. Feeder cattle saw technical selling across the market as the weak live cattle market, and a strong move higher in the wheat market keep the sellers active. The low placement number on the COF report Friday should be supportive of Feeder cattle prices overall.   The price action was weak on Friday going into the end of the week, but the friendly Placement numbers should help provide some support next week.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on end of week profit taking, but the market fails to hold on to early session grains. Dec hogs gained .125 to 73.325 and Feb. hogs lost .050 to 76.625. December hogs lost 4.950 on the week.

December hogs finished with narrow gains as prices kept challenged technically, looking to the previous lows near the $72.00 price level.  Hog prices were extremely choppy during the session, which could be an indicator that prices are starting the bottoming process at this point, but the fundamental will still be the key to turning the market. Cash market remains soft, pressuring the hog market.  Afternoon direct trade on Thursday stayed soft, and that limited gains on Friday.  The Lean Hog Index traded 1.06 lower to 84.83, and lost  3.99 for the week.  The index is trading at its lowest point since early March last spring.  The premium of the index to Dec hogs should help support the front of the market, trading at a 11.505 spread today, but couldn’t overcome the technical selling pressure on the day.  At midday, the retail pork carcass prices are trying to get back above the $100 level, gained 4.10 to 102.38 on movement of 286 loads, that strength may be fleeting, as afternoon closes have had a difficult hold midday gains. The fundamentals have stayed very soft, and keep the sellers active in the market.  The hog market is may be starting the bottoming process, with an oversold market, and pork prices representing a good value.

Top Farmer Midday Update 10-22-21

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CORN

  • Dec up 5 @ 5.37
  • Corn has been in a sideways trading range – has support under the market with end user buying
  • Higher input costs next year could lower corn acres
  • NOAA came out with a US 3 month weather forecast calling for above normal temps for most of the US
  • Talk that China’s economy could be slowing – could reduce their commodity import demand

SOYBEANS

  • Nov down 4 @ 12.20
  • Soybeans yesterday were pressured by profit taking as well as lower energy and veg oil prices
  • Soybean market is struggling to rally because of possible higher crop and lower exports which could suggest a higher carryout at 500 mb vs the USDA’s 320 mb
  • Soybean exports are currently down 35% from a year ago
  • The Phase 2 deal between the US and China may not happen, which means they may become a buyer of only what they need (an won’t have to fulfill a deal)

WHEAT

  • Dec wheat up 15 @ 7.56, Dec KC up 23 @ 7.71, Dec MNPLS up 23 @ 10.08
  • Most wheat buyers in North Africa and the Middle East are short of wheat and need to buy
  • Europe’s wheat export pace should slow because they are ahead of projections already
  • Talk that Russian prices will continue to move higher – export tax could be $70 per metric ton by month end
  • Dec Minneapolis wheat breached the $10 mark today

CATTLE

  • Dec LC down 0.400 @ 129.150 & Apr FC down 1.550 @ 162.550
  • Cattle on Feed report is due for release this afternoon
  • On feed numbers are projected at 99.4% of last year, placements projected at 101.4%, and marketings projected at 97.5%
  • Cash has been steady with last week
  • Choice cuts up 0.63 and select down 0.08
  • Cattle slaughter projected at 118K
  • CME Feeder Cattle Index for 10/21: up 1.08 @ 155.11

HOGS

  • Feb hogs up 0.125 @ 76.800 & Feb pork cutout @ 90.700
  • Hogs could see a recovery today, as liquidation usually runs 2-3 days
  • Lower exports Thursday indicated more pork available domestically
  • There is still a large supply of hogs to the market and that may be the case through the end of the year
  • National Direct Afternoon report declined 1.50
  • Hog slaughter projected at 475K
  • CME Lean Hog Index for 10/22: down 1.06 @ 84.83

Top Farmer Closing Commentary 10-21-21

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CORN HIGHLIGHTS: Corn futures closed lower, giving up 5 to 7 cents after strong gains yesterday. Export sales at 50.1 mb were termed supportive, but were likely already factored into yesterday’s firm price action. Commodities, in general, sunk today on what may be termed a risk off session where corn dropped in sympathy sharply lower soybean and wheat prices as well as lower energy and equities.

Higher input costs for the year ahead will likely keep farmer selling light. Due to tight inventory coming into the harvest, farmers will be patient waiting for basis levels to improve, higher futures, or both. Year-to-date export sales are 1.1375 bb, a solid pace and above last year’s level at this same time, (1.115.5 mb). Though today was an off day with there not being much new news and that could be a problem with trying to sustain a near term uptrend. Typically, at this time of the year, other than harvest there isn’t a whole lot the market can factor into price movement. Ironically big picture perspectives are creating dynamic potentials for price and will likely suggest the market will move on perception. That is, corn prices could be well supported anticipated more soybean acres even though the planting season is several months away.

SOYBEAN HIGHLIGHTS: Soybean futures, despite the highest export sales figure this week in nearly a year, slumped losing more than 20 cents. November led today’s losses, closing at 12.24, down 21-1/2 cents. A downward reversal in crude oil and likely traders exiting longs after four higher closes, coupled with a “buy the rumor sell the fact” export sales event, had prices on the defensive. November 2022 dropped 19 cents after running into over-head resistance at the 50-day moving average at 12.48 to finish the session at 12.29-3/4.

Export sales at 105.8 mb were supportive and outstanding. Yet, the way the market behaved today one has to believe that stronger prices the previous four sessions had this already factored in so the market was buying the rumor and sold the fact. Soybean oil was off today in sympathy with weaker palm oil. Planting progress continues to move along swiftly in South America but expectations for continued dry weather concerns could have the market on edge soon. Year to date export sales are 1.075 billion. This compares to 1.666 billion at this same time a year ago. A continued decline to the Brazilian real is making beans more attractive, yet near term needs likely going to be met from the US. Basis levels, in parts are firming continuing to suggest light farmer selling and/or strong end user buying.

WHEAT HIGHLIGHTS: Wheat futures, along with most commodities, settled back today on profit-taking and long liquidation. Dec Chicago wheat lost 8 cents, closing at 7.41-1/4 and July down 6 at 7.46-3/4. Dec KC wheat lost 12 cents, closing at 7.47-3/4 and July down 11-1/4 at 7.47-1/2.

Days like today don’t always have a good explanation; yesterday’s momentum in the grains did not carry through and the wheat complex was no exception. Pressuring wheat today was the lower trade in corn and soybeans, as well as long liquidation. Even the recent shining star in wheat, the Minneapolis contract, showed losses of 4-7 cents in the front months. Paris milling wheat futures also set back today after new highs yesterday. Despite an off-day, news for wheat remains mostly bullish. Matif wheat futures are at 9-year highs. China’s winter wheat seeding is lagging due to wet weather at 26% complete vs 53% average. The managed funds are estimated to now be modestly long Chi wheat (about 2,000 contracts). In other world news, Ukraine raised their wheat export number to 25 mmt vs the USDA’s 23 mmt. Russian wheat prices are also at 14-week highs and their export tax may reach $70 per metric ton within a month. On today’s export sales report, the USDA reported an increase of 13.3 mb of wheat export sales – this is below the pace needed to meet their goal of 875 mb.

CATTLE HIGHLIGHTS: Cattle futures finished with moderate losses across the complex, as broad based selling pressure hit the ag commodity markets. Cattle saw additional pressure from poor export sales performance, and the squaring positions before Friday’s Cattle on Feed report. Oct cattle lost .975 to 124.975 and Dec cattle dropped .975 to 129.550.  Feeder cattle finished mixed on the session with October gaining .325 to 156.250, but Nov feeders lost .275 to 159.075. 

Selling pressure in the lean hog market, and ag commodities in general keep pressure on cattle markets on Thursday, as cattle tried to find some footing.  Weekly export sales added to the selling pressure, as new sales last week only totaled 7,800 mt, a marketing yar low.  This was disappointing give the weakness seen in retail value over the past weeks, that export business was moved to the sideline. The USDA will release the next set of Cattle on Feed numbers on Friday, and this added additional pressure as the market may have been squaring up positions going into the reports.  Expectation of for total cattle on feed to be down 0.7%, pr approximately 11.63 million head on feed.  The most closely watch number will be the placements, expected to be 1.4% above last year, and Marketing down 2.8% from last year.  The report will be release at 2:00 p.m. CST after the market close tomorrow. The cash market was very quiet on Thursday with minimal business. and like last week, $124 seemed to catch most trade, running steady with last week.  The market was looking for some additional trade to take place, but was disappointed. Most trade for the week may be complete, with exception of lighter cleanup trade going into the end of the week.  Midday retail values were firmer, as  Choice carcasses gained .44 to 280.47, and Select added 1.01 to 263.81, but that failed to support the market.  The load count was light/moderate at 71 loads. Feeder cattle traded mixed across the complex, weak grain markets and live cattle trade weighed on feeders.  The price action was weak on Thursday, and the path may be lower on some technical pressure going into the end of the week.  With cattle on feed being reported, choppy trade will most likely be the play before the report.

LEAN HOG HIGHLIGHTS: Hog futures finished strongly lower, with triple-digit losses for the second consecutive day as the market broke down technically. Dec hogs dropped 2.825 to 73.200 and Feb. hog lost 2.550 to 76.675.

After the charts saw technical damage with the weak price action, another wave of technical selling broke the hog market lower, now looking to test the September lows at the $72.00 level.  Strong selling pressure in the ag commodity sector added to the losses, and the hog market saw another round of long liquidation.  Cash market remains soft, pressuring the hog market.  Afternoon direct trade on Wednesday stayed soft, not helping the hog market on the open.  The Lean Hog Index traded .74 lower to 85.89, its lowest point since early March last spring.  The premium of the index to Dec hogs should help support the front of the market, trading at 12.690 spread today, but couldn’t overcome the technical selling pressure on the day.  The retail pork product market has been the back breaker in the hog market as retail values are at their lowest point in months, and settling below the psychological $100 level.  At midday, the retail pork carcass sector sharply higher on value buying, gaining 7.95 to 104.82 on movement of 150 loads, that strength may be fleeting, and hog prices couldn’t overcome the selling pressure on the day.  Weekly export sales were at  20,900MT, down 38% from last week, adding to the market disappointment. The fundamentals have stayed very soft, and keep the sellers active in the market.  The hog market is technically broken, but may be getting to a value, and is oversold, but at this time, the market is searching for a near-term low.

Top Farmer Midday Update 10-21-21

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CORN

  • Dec down 5 @ 5.34
  • Weekly ethanol production was at 1.096 million barrels per day last week (3rd highest weekly average rate on record)
  • Mexico’s Ag Minister said they will not limit US GMO corn imports
  • At current export pace, final exports might be up 350 mb from the USDA estimate, which could be supportive to corn down the road
  • Funds are long about 240,000 corn contracts
  • USDA reported an increase of 50.1 mb of corn export sales

SOYBEANS

  • Nov down 13 @ 12.32
  • Dalian palm oil, soybean oil, and rapeseed oil all making new highs
  • US soybean oil supported by talk of higher demand for green fuel
  • Current soybean export commitment is half of what it was at this time a year ago
  • Funds are long about 50,000 soybean contracts
  • USDA reported an increase of 105.8 mb of soybean export sales

WHEAT

  • Dec wheat down 7 @ 7.42, Dec KC down 11 @ 7.49, Dec MNPLS down 3 @ 9.87
  • Matif wheat futures are at 9 year highs
  • China’s winter wheat seeding is lagging due to wet weather at 26% done vs 53% average
  • Ukraine raised their wheat export number to 25 mmt (vs the USDA’s 23 mmt)
  • Funds are now a little bit long Chi wheat (about 2,000 contracts)
  • USDA reported an increase of 13.3 mb of wheat export sales

CATTLE

  • Dec LC down 0.625 @ 129.900 & Apr FC down 0.175 @ 164.100
  • The Cattle on Feed report will be released tomorrow
  • Live cattle futures are now in a sideways trading range
  • If cash is steady, we may remain in a sideways range for some time
  • Choice cuts down 0.85 and select up 1.27
  • Cattle slaughter projected at 120K
  • CME Feeder Cattle Index for 10/20: down 0.07 @ 154.03

HOGS

  • Feb hogs down 1.275 @ 77.950 & Feb pork cutout @ 93.175
  • The chart gap has now been filled in December, February, and April
  • Fundamentals for the hog market are bearish
  • National Direct Afternoon report declined 0.04
  • Hog slaughter projected at 478K
  • CME Lean Hog Index for 10/21: down 0.74 @ 85.89

TFM Sunrise Update Oct 21, 2021

Grain - A hand scooping soybeans

CORN

Corn futures were mixed overnight and are slightly lower this morning.  Dec is down 1-1/2 cents to 5.37-3/4 as the dollar attempts to recover from falling to 3-week lows, and crude eases overnight.  This week Informa estimated U.S. 2022 corn acres near 92.3 mil vs 93.3 this year.  The crop is estimated near 15.213 bil bu vs 15.019 this year.  Yield is estimated at a record 181.0 BPA.  December 2022 corn futures are fractionally lower this morning at 5.34.  Trade estimates for this morning's USDA Weekly Export Sales are 700,000 to 1.40 mil tons.  Meanwhile, the newswires for corn are too quiet to break prices out of their trading ranges.  Much of the market chatter continues to flow around scarcity of 2022 inputs affecting breakeven costs.  

SOYBEANS

The soy complex is lower this morning.  Nov beans are down 6 cents to 12.39-1/2, a dime off last night's high of 12.49-1/2 and 3 cents above the low of 12.36-1/2.  12.50 may be viewed as a sell for some of the long position holders in the market, leading to some market resistance today.  On the other hand, higher product values are helping soybean futures.  Talk of increased U.S. soyoil use for green fuel and new highs for rape oil suggest funds may still want to be buyers in that market.  Trade estimates for this morning's USDA Weekly Export Sales are 1.50 to 2.50 mil tons for beans, 150,000 to 400,000 tons for soymeal; And, 4,000 to 25,000 for soyoil.  Overnight, Chinese Jan bean futures were up 56 yuan ; Soymeal unchanged; Soyoil up 324; Palm oil up 334; Corn up 17.  Malaysian palm oil prices overnight were down 113 ringgit (-2.23%) at 4958.  China’s soybean imports from the U.S. plunged 86% year-over-year in September to 169,439 tons, according to Chinese customs data Wednesday.  U.S. soy exports were disrupted after Hurricane Ida struck Louisiana in late August and cargoes faced competition from No. 1 soybean producer Brazil.  China’s soybean imports from Brazil fell 18% y/y to 5.94m tons in September.

WHEAT

Wheat futures cooled overnight with the Dec Chicago contract down 4 cents to 7.45-3/4, KC down 6-1/2 to 7.53-1/4; And, MPLS down 1-1/2 cents to 9.88-1/4 after setting a new contract high overnight at 9.96-3/4.  Potentially record low World milling wheat supplies is helping spring wheat futures target the 10.00 level.  Trade estimates for this morning's USDA Weekly Export Sales are 250,000 to 650,000 tons.  Dec Chicago prices are back testing 7.50 after seeing a pullback for much of October.  The contract high from August 13 stands at 7.86-1/2.  The contract high for Dec KC wheat is less than 20 cents away at 7.69.  Globally, surging prices in the U.S. and Europe, especially France means a loss in export competitiveness while supplies in the Black Sea area and Argentina remain weaker.  Volatility in the dollar and delayed planting in China due to heavy rains should keep prices choppy while attempting to maintain an uptrend, overall.  La Nina weather could reduce U.S. winter and spring HRW rains.  This week, Informa estimated U.S. 2022 all wheat acres near 48.8 vs 46.7 this past year.  Russia export prices continue to firm and the export tax increase.    

CATTLE

Cattle futures are called mixed for this morning after finishing higher on late buying.  A steady to firmer cash tone and stability in the retail market supported the cattle markets and Dec held around the $130 price level, consolidating under the 100-day moving average.  The technical close on Tuesday was weak after Dec futures tested Tuesday's high, falling just short of pushing back above.  The market could be squaring positions in anticipation of Friday’s cattle on Feed report.  The cash market came to life on Wednesday, and like last week, $124 seemed to catch most trade, running steady with last week.  There was some trade catching slightly higher bids, and that was supportive on the front-end October contract.  Midday retail values were mixed and held into the close.  Choice carcasses lost .85 to 280.03, and Select added 1.27 to 262.80.  The load count was light at 128 loads.  Choice carcasses are trading near 2-½ month lows, but seem to be finding some footing at the $280.00 level.  Weekly export sales will be released this morning.  Feeder cattle traded higher across the complex, despite the strong money flow in the grain markets.  The Feeder Cash Index traded .07 higher to 154.03, and still holds a small discount to the front-month Oct futures, but the gap has significantly narrowed.

HOGS

Hogs are called steady to lower.  The market looks technically soft in the short-term, and the lack of true bullish news means Dec can potentially have a break in Dec to the $75.00 support level.  A further move past that level does open the door for a retest of the recent lows.  Cash market remains soft with the Lean Hog Index trading .25 lower to 86.63.  The premium of the index to Dec hogs should help support the front of the market, trading at 10.605 spread today, while unable to overcome the technical selling pressure on Wednesday.  The retail pork carcass sector was softer, losing 2.40 to 96.87 on movement of 397 loads.  Pork carcasses closed below the $100 level on Tuesday’s close, and the market can hopefully find a bottom in this window.  USDA weekly export sales will be announced this morning, and could help provide some direction for the market on the open.

Top Farmer Closing Commentary 10-20-21

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CORN HIGHLIGHTS: Corn futures finished with strong gains of 8 to 9 and near the day’s high. Strength in wheat and soybean, a lack of farmer selling, and stronger energy prices provided support today. Short covering was also noted as traders may be starting to give up on a harvest sell off. December gained 9-0 cents to finish the session at 5.39-1/4, its highest close since October 4. December of 2022 closed 8-3/4 cents higher at 5.34-1/4.

Wheat prices continue to move higher with new contract highs posted for spring wheat. World supplies of feed grains remain snug and despite harvest pressure, end users may be looking more aggressively this year despite high prices. The main reason is concern over production for the year ahead. We have herd some talk of feedlots raising bids to insure that have enough supply for next summer. This makes sense as they, like producers can hedge their risk once prices are secured. While it is early in the growing season, attention will focus on the la Nina weather pattern in South America. Recent rains have been beneficial but Argentina and southern Brazil are expected to turn dryer. Add to that, talk that Brazilian trucker may strike creates another wrinkle of uncertainty. While Brazil is expected to have little old crop to sell, it nonetheless creates a less than stable picture and hints at more US business. The Brazilian currency is at six-month lows, normally friendly for exports, yet a more challenging environment for importing fertilizer and other materials to produce crops.

SOYBEAN HIGHLIGHTS: Soybean futures pushed higher today on talk China is to purchase US soybeans for PNW shipping and on another session of strong gains in both soybean oil and meal, which have now closed higher five consecutive sessions. Short covering is noted as a Brazilian truckers strike is possible at a time when US soybeans are considered cheapest in the export market. November closed 17-1/2 cents firmer at 12.45-1/2. December meal gained 5.80 and oil 2.31 cents higher in December.

The soybean complex has a lot of wheels in motion at a time of year when typically, news, other than harvest progress and results, is lacking. What you are really seeing is reaction to a lack of large inventories and consequently variables that may normally not have much impact are viewed much more critically. As an example, the market could have sustained buying interest today on what might be considered a growing dry pattern in north Argentina and southern Brazil. Because of tight inventory and potential for a La Nina pattern to affect production buyers may be much more aggressive, almost regardless of price. Brazil historically has economic disruptions and typically a potential trucker strike wouldn’t mean much. In uncertain times however this may have a much more meaningful impact for end users and those who trade. We were a bit surprised at the momentum of strength today but obviously there’s concern that tight vegetable oil supplies and a reduced crush pace the last several months could mean continued tight soybean oil supplies. One must now wonder if China, who is struggling with an energy depletion, will more aggressively purchase ethanol and soybean oil.

WHEAT HIGHLIGHTS: Today, wheat futures were sharply higher, driven by gains in the other grains, a lower US Dollar, and a bullish supply situation. Dec Chicago wheat gained 13-1/4 cents, closing at 7.49-1/4 and July up 12-1/4 at 7.52-3/4. Dec KC wheat gained 11-1/2 cents, closing at 7.59-3/4 and July up 9-1/2 at 7.58-3/4.

Spillover from a notable day in the grain complex had all three wheat classes sharply higher. MPLS wheat has been higher for 11 of the past 14 days and the Dec contract is approaching the $10 mark with a high today of 9.94-1/2. The USDA may not have fully shown the drop in last year’s global wheat production and that is evident today. From a global perspective, many world buyers are short of wheat, especially in north Africa and the Middle East. In the European Union, shipments of wheat so far are at 10 mmt, which is 60% more than a year ago. This is likely unsustainable, and their exports will have to be likely lowered in order maintain a positive balance sheet. On Thursday, China will attempt to sell 37 mb (1 mmt) of wheat from their reserves at auction. This will be the first sales from state reserves since May. Due to a higher export tax, Russian wheat prices also continue to increase for the 14th consecutive week. Paris milling wheat futures, up around the equivalent of 14 cents per bushel, managed to make new highs again. From a weather standpoint, La Nina should bring dryness to the US Southern Plains as well as parts of Brazil and Argentina – something to keep an eye on. The managed funds remain net short Chicago wheat, and net long MPLS and KC wheat.

CATTLE HIGHLIGHTS: Cattle futures finished higher with late buying in the cattle markets.  A steady to firmer cash tone and stability in the retail market supported the cattle markets. Oct. cattle gained .950 to 125.950 and Dec cattle added .500 to 130.525.  Feeder cattle finished higher as well, with Oct feeders ere .825 higher to 155.925. 

December stays held in around the $130 price levels, and consolidates under the 100-day moving average. The technical close on Tuesday was weak, and Dec futures challenged that high from Tuesday, just falling short of pushing back through.  The market could be squaring positions in anticipation of Friday’s cattle on Feed report.  The cash market started some trade on Wednesday, and like last week, $124 seemed to catch most trade, running steady with last week.  There was some trade catching slightly higher bids, and that was supportive on the front-end October contract. Most trade for the week may be complete, with exception of lighter cleanup trade going into the end of the week.  Midday retail values were mixed, as  Choice carcasses lost .37 to 280.51, and Select added 1.47 to 263.00. The load count was light/moderate at 77 loads. Weekly export sales will be released on Thursday morning, and could help set a tone for the market. Choice carcasses are trading near 2 ½ month lows, but seem to be finding some footing at the $280.00 level. The afternoon close in retail prices will have a big impact on the start of the trading session on Wednesday.  Feeder cattle traded higher across the complex, despite the strong money flow in the grain markets. The Feeder Cash Index traded .07 higher to 154.03, and still holds a small discount to the front-month Oct futures, but the gap has significantly narrowed.

LEAN HOG HIGHLIGHTS: Hog futures finished strongly lower with triple-digit losses on the front month of the market. Technical selling and long liquidation keep the selling pressure in the hog market. Dec hogs dropped 1.375 to 76.025 and Feb. hog lost 1.225 to 79.225.

December hogs have been consolidating just above the gap on the December charts.  The top of that gap is  at 77.200, and price broke through that level this morning, and selling pressure increased. The charts saw technical damage with the weak price action, ad are open for additional long liquidation, possibly targeting the $75.00 level. Cash market remains soft, pressuring the hog market.  Direct trade on Tuesday closed mixed with weakness in carcass based prices and direct live prices, which only added to the selling pressure.  The Lean Hog Index traded .25 lower to 86.63.  The premium of the index to Dec hogs should help support the front of the market, trading at 10.605 spread today, but couldn’t overcome the technical selling pressure on the day.  At midday, the retail pork carcass sector was firmer, gaining 1.74 to 101.01 on movement of 167 loads.  Pork carcasses closed below the $100 level on Tuesday’s close, and the market can hopefully find a bottom in this window.  USDA weekly export sales will be announce tomorrow morning, and could help provide some direction for the market on the open.  The fundamentals have stayed very soft, and keep the sellers active in the market.  The hog market looks soft technically in the short-term, and the lack of true bullish news keeps the market potentially have a break in Dec to the $75.000 support level. A further move past that level does open the door for a retest of the recent lows.

Top Farmer Midday Update 10-20-21

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CORN

  • Dec up 4 @ 5.34
  • Talk that China might ban fertilizer exports – could push US fertilizer prices even higher
  • Brazil corn is 54% planted vs 49% average
  • Resistance in corn is around the 5.35 area
  • The EU imports of corn are down 31% year on year
  • The southern US Corn Belt could get rains this weekend

SOYBEANS

  • Nov up 14 @ 12.42
  • Talk of China looking for US soybeans from the Pacific Northwest for February
  • The Brazilian Real is at 6 month lows, partly triggering farmer selling in that region
  • US soybeans are currently the cheapest in the world
  • Palm oil is making new contract highs
  • CONAB reported Brazilian soybean seedings at 24% complete

WHEAT

  • Dec wheat up 11 @ 7.47, Dec KC up 8 @ 7.56, Dec MNPLS up 12 @ 9.86
  • They USDA may not have fully shown the drop in last year’s global wheat production
  • Many world buyers are short of wheat (especially north Africa and the Middle East)
  • EU shipments of wheat so far are at 10 mmt (60% above a year ago) – this is likely unsustainable
  • MPLS wheat has been higher for 11 of the past 14 days
  • Thursday, China will attempt to sell 37 mb (1 mmt) of wheat from their reserves

CATTLE

  • Dec LC down 0.100 @ 129.925 & Apr FC up 0.400 @ 163.450
  • The next Cattle on Feed report will be released on Friday
  • The CoF report expected to continue to show large numbers as on the previous report
  • Live cattle futures continue to hold their gains – possibly indicating support levels
  • Choice cuts down 0.15 and select down 0.81
  • Cattle slaughter projected at 121K
  • CME Feeder Cattle Index for 10/19: up 0.20 @ 154.10

HOGS

  • Feb hogs down 0.100 @ 80.350 & Feb pork cutout up 0.450 @ 94.750
  • The chart gap below current levels was filled in December and February but remains open in April
  • China’s pork output increased 38% for the first three quarters of this year
  • National Direct Afternoon report declined 0.27
  • Hog slaughter projected at 478K
  • CME Lean Hog Index for 10/20: down 0.25 @ 86.63

TFM Sunrise Update Oct 20, 2021

Grain - A hand scooping soybeans

CORN

Corn futures were firm overnight with Dec up 3 cents to 5.33-1/4 and the contract's 50-day Moving Average.  Informa estimated U.S. 2022 corn acres at 92.3 mil vs 93.3 this past year as growers face the high cost of planting especially fertilizer, energy and labor.  Meanwhile, U.S. harvest is half over heading into more good weather forecasts.  Basis bids for corn shipped by barge to the U.S. Gulf Coast for export were weaker on Tuesday on rising grain supplies as the U.S. harvest accelerated past the halfway mark, traders said.  Bids were mixed at processors and river terminals around the U.S. Midwest on Tuesday morning.  The lower dollar yesterday helps support commodities in general.  Today, so far, the greenback is firming up and crude is seeing a pullback.  Today's Weekly Ethanol Stats are expected to show production higher than last week at 1.042 mil barrels per day which would be the third consecutive week of increase in production.  Stockpiles are estimated to be 19.974 mil bbl vs 19.847 mil a week ago.

SOYBEANS

The soy complex higher this morning.  Nov beans are up 9 cents to 12.37 and are testing Tuesday's one-week high of 12.39-1/4.  The contract managed to close higher for a fourth consecutive day Tuesday.  Soyoil is making a fresh 2-month high on gains of 1.00; And, bean meal is continuing to rebound from last week's new lows.  Spot basis bids for soybeans rose at processors and elevators in the eastern U.S. Midwest on Tuesday, grain dealers said.  Chinese Jan bean were down 34 yuan overnight; Soymeal up 29; Soyoil up 48; Palm oil up 28; Corn up 7.  Malaysian palm oil prices overnight were up 122 ringgit (+2.47%) at 5066 extending its rise with concerns over supply shortages in No. 2 grower Malaysia and high petroleum prices.

WHEAT

Wheat futures are firm this morning with the Dec Chicago contract up 5-1/2 to 7.41-1/2 cents.  Yesterday's higher action solidified a pattern of higher lows on the daily charts above near and long-term moving average support levels.  Rabobank, today estimates Chicago wheat futures will probably trade between $7.25 and $7.40 per bushel through the second quarter of 2022 on low global stockpiles, so this is market chatter for traders to consider.  Dwindling stocks of wheat, particularly in exporting nations, are on track to decline over the next nine months driven by high use of wheat in animal feed as a substitute for corn as well as downgraded wheat quality in the EU.  Overnight, Dec KC  followed suit after trading as much as 5-3/4 cents to 7.54 overnight.  Dec MPLS wheat gained 5-3/4 cents to match Friday's new high at 9.80.  Spot basis bids for HRW wheat were steady to firm at truck market terminals in Kansas on Tuesday.  Pending international tenders include a United Nations agency tender to purchase about 200,000 tons of milling wheat on behalf of the Ethiopian government.

CATTLE

Cattle futures are called steady to lower.  The lack of follow through in the cattle market to start the week was disappointing, and the second consecutive weak close could signal cattle may be at the top of the range.  The overall near- term trend is firmer, but prices may be poised to check some recent support.  Futures finished lower for the second straight session as buying wanes at the top of the range.  December held around the $130 price level but failed to push higher after a strong start to the day.  The technical close was weak, and December cattle posted a bearish turn on the daily charts but will need some confirmation with additional selling pressure on Wednesday.  The cash market is still quiet to start the week, as bids are still undefined.  The majority of cash trade will likely hold off until the second half of the week.  Midday retail values were higher, but that failed to support the market overall.  Boxed beef values held gains and closed firmer with Choice carcasses gaining .79 to 280.88 and Select adding 1.72 to 261.53.  The load count was moderate at 147 loads.  Choice carcasses are trading near 2 ½ month lows but seem to be finding some footing at the $280.00 level.  The premium of the feeder futures to the cash index limits the front end of that market.  The Feeder Cash Index traded .20 higher to 154.10, and still holds a discount to the front-month Oct futures, but the gap has significantly narrowed. 

HOGS

Hogs are called steady to lower on follow-through from Tuesday's triple-digit losses as the weak cash tone keeps pressure on the market.  December hogs have been in a tight trading range with 79.000 on the top and 77.250 on the bottom, consolidating over the past 5 days.  The consolidation stays just above the gap on the December charts with the top of that gap at 77.200.  Cash will still be a key to the hog market overall.  Direct trade on Tuesday closed softer with weakness in carcass based prices losing .27 and direct live prices dropping .53, which could pressure the market on the open.  The Lean Hog Index traded .71 lower to 86.88.  The premium of the index to Dec hogs should help support the front of the market, trading at 9.480 spread.  At midday, the retail pork carcass sector was firmer, but those gains evaporated going into the close, losing 1.44 to 99.34, breaking the $100.00 barrier, but the product movement was good at 430 loads.  At below the 100 level, pork carcasses are trading at their lowest levels since September or lower.

Top Farmer Closing Commentary 10-19-21

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CORN HIGHLIGHTS: Corn futures traded both sides of steady, eventually closing with small losses as overhead resistance at the previous nearby high held. December reached 5.37 as its daily high, just under 5.38-3/4 from October 8. Increased farmer selling and harvest pressure as well as a lack of new news kept prices on the defensive.

As harvest progresses it is likely that prices will come under additional pressure. Technical traders will make the point that the 50-day moving average has held as resistance again, a key moving average that the market has been unable to rally above since mid-August. A potential right shoulder on a head and shoulders formation is forming which points to downside objective in December of near 465. The fertilizer situation continues to be a major concern but we’re not sure just yet how important it will be in the long run. It could be wildly critical or eventually things smooth out. Input structure for South American corn is likely more affected. On the one hand South American farmers have had more time to secure input needs yet sharply rising prices may have kept farmers waiting for a better opportunity a which has not occurred and consequently they may have to cut back or not use fertilizer at all. Harvest pressure will make some impact this week as farmers will likely run full steam unless they are rained out. 52% of the crop is harvested as of Sunday, well ahead of the five-year average of 41%.

SOYBEAN HIGHLIGHTS: Soybean futures finished higher for the fourth session in a row on continued export talk and strength in both soybean oil and meal. March futures led today’s rally closing at 12.45-3/4, up 8-1/2 cents. Meal gained 3.00 to just under 5.00 per ton and oil up 15 to 37 cents. Meal is looking more like it is a long-term buy.

After a negative report last week, the futures price recovery has been encouraging and impressive as November has experience over a 50-cent range, this while harvest is quickly moving along. Yesterday the USDA crop progress report indicated harvest was 60% complete, less than most were anticipating but above the 5-year average of near 50%. Good weather the first several days of this week should allow harvest to rapidly move along with expectations that by the end of this week harvest could be near 85% complete. The soybean meal market has found a footing on what we would term an oversold market. Soybean oil continues to find support on tight world vegetable supplies and expectations that a movement more toward bio energy has long term friendly implications for additional crush needs. There are several plants that are either under construction or hope to be under construction within the year.

WHEAT HIGHLIGHTS: Wheat futures were mixed to lower today on profit taking and a lack of fresh news. Dec Chicago wheat lost 1/4 cent, closing at 7.36 and July up 1/2 cent at 7.40-1/2. Dec KC wheat lost 3/4 cent, closing at 7.48-1/4 and July down 3/4 at 7.49-1/4.

December Chi wheat has closed higher for the past three trading sessions but could not make it a fourth today. Though wheat did have solid gains earlier in the day, by the close that action subsided. As we mentioned yesterday, fresh news will be needed to drive the market higher, and today’s lack of such news has kept prices relatively flat. Also playing a hand was yesterday’s poor export inspections number which came in at only 5.1 mb. Profit taking today and spill over from a lower corn trade were also factors. While not able to breach the highs on made on Friday, Minneapolis wheat did perform better than its counterparts today, with gains of 6-1/2 cents in December. According to the USDA, 70% of winter wheat is planted vs 71% average, and next week we will get the first 2022 crop ratings. Total inspections are around 343 mb, which is down about 13% from a year earlier. Offering some support to the wheat market is the fact that Russian prices are increasing because of their high export tax. Paris milling wheat futures started the day higher as well but gave up those gains into the close.

CATTLE HIGHLIGHTS: Cattle futures finished lower for the second straight session, as buying support has been running out at the top of the range. Oct. cattle lost .450 to 125.000 and Dec cattle dropped .400 to 130.025.  Feeder cattle finished lower, with Oct feeders .650 lower to 155.100. 

December stays held in around the $130 price levels, but failed to push higher after a strong start to the day, as buying support seems to dry up. The technical close was weak, and December cattle posted a bearish turn on the daily charts, but will need some confirmation with additional selling pressure on Wednesday. The cash market is still quiet to start the week, as bids are still undefined.  The majority of cash trade will likely hold off until the second half of the week.  Midday retail values were higher, but that failed to support the market overall. Choice carcasses gained .72 to 280.81, and Select added 1.82 to 261.63. The load count was light at 66 loads. Choice carcasses are trading near 2 ½ month lows, but seem to be finding some footing at the $280.00 level. The afternoon close in retail prices will have a big impact on the start of the trading session on Wednesday.  Feeder cattle traded mixed to mostly lower across the complex. The premium of the futures to the cash index limits the front end of the market. The Feeder Cash Index traded .20 higher to 154.10, and still holds a discount to the front-month Oct futures, but the gap have significantly narrow. The weak tone in the live cattle markets helped pressure feeders as the upside seemed limited.  The lack of follow through in the cattle market to start the week was disappointing, and the second consecutive weak close could signal that cattle may be at the top of the range.  The overall near term trend is firmer, but prices may be poised to check some recent support.

LEAN HOG HIGHLIGHTS: Hog futures finished sharply lower with triple-digit losses as the weak cash tone keeps pressure on the market. Dec hogs dropped 1.350 to 77.400, as the selling pressure resumed after a day off yesterday.

December hogs have been in an tight trading range with 79.000 on the top and 77.250 on the bottom, consolidating over the past 5 days.  The consolidation stays just above the gap on the December charts.  The top of that gap is  at 77.200 on the Dec futures, with Wednesday low at 77.250, and 77.275, and buyers have stepped in just above the gap. A fill of the gap could be  a signal for further selling, or a turning point for upside move.  Cash market will still be a key to the hog market overall.  Direct trade on Tuesday closed mixed with weakness in carcass based prices and firm direct live prices, but the market failed to find buying on the strong live prices. The Lean Hog Index traded .71 lower to 86.88.  The premium of the index to Dec hogs should help support the front of the market, trading at 9.480 spread today.  At midday, the retail pork carcass sector was firmer, gaining 1.64 to 102.42 on good movement of 239 loads.  At the 102 level, pork carcasses are trading at their lowest levels since September.  The improvement is both cash prices and retail carcasses getting some footing would go a long way of bringing buyer back to the hog market.  The hog market looks soft technically in the short-term, and the lack of true bullish news keeps the market potentially have a break in Dec to the $75.000 support level.

Top Farmer Midday Update 10-19-21

Grain - Corn Ear of Sweet

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CORN

  • Dec up 2 @ 5.35
  • US corn harvest is 52% complete (vs 41% average)
  • Corn export inspections totaled 38.4 mb for last week
  • Total inspections are around 160 mb – down about 25% from a year ago
  • Dec corn has closed higher for three consecutive trading sessions
  • Ethanol production margins are higher due to a rally in energy prices

SOYBEANS

  • Nov up 13 @ 12.35
  • US soybean harvest is 60% complete (vs 55% average)
  • Soybean export inspections totaled 84.4 mb for last week
  • Total inspections are around 215 mb – down about 50% from a year ago
  • Nov soybeans have closed higher for 3 consecutive trading sessions
  • Brazil soybean plantings are about 25% done

WHEAT

  • Dec wheat up 8 @ 7.44, Dec KC up 5 @ 7.54, Dec MNPLS up 7 @ 9.75
  • 70% of US winter wheat is planted (vs 71% average)
  • Wheat export inspections totaled 5.1 mb for last week
  • Total inspections are around 343 mb – down about 13% from a year ago
  • Dec Chi wheat has closed higher for 3 consecutive trading sessions
  • Fundamentals remain bullish with tight world stocks and lowered production

CATTLE

  • Dec LC up 0.400 @ 130.825 & Apr FC up 0.325 @ 163.425
  • The next Cattle on Feed report will be released on Friday
  • Feeder cattle broke to the downside yesterday – higher placements are expected
  • Cash cattle are expected to trade steady this week
  • Choice cuts down 0.15 and select down 0.81
  • Cattle slaughter projected at 121K
  • CME Feeder Cattle Index for 10/18: up 0.55 @ 153.90

HOGS

  • Feb hogs down 1.075 @ 80.700 & Feb pork cutout @ 94.975
  • The gaps on the charts have yet to be filled completely
  • Cash and cutouts continue to show weakness
  • National Direct Afternoon report declined 0.09
  • Hog slaughter projected at 477K
  • CME Lean Hog Index for 10/19: down 0.71 @ 86.88

TFM Sunrise Update Oct 19, 2021

Grain - Yellow corn that has had its husks removed

CORN

Corn futures were narrowly mixed overnight atop Monday's higher closing ranges.  Dec is up a penny this morning to 5.33-3/4.  A steep 44 point drop in the dollar overnight is helping the grain complex rise to a one-week high.  This is also keeping a bid under the rising crude oil market, which bodes well for strength in corn.  Overall, corn prices continue to consolidate, wedged in between converging 50-day and 200-day moving averages just above and below current prices as harvest moves forward.  U.S. corn harvest is 52% complete as of Sunday, up 11 points from last week and the 5-year average of 41%.  Crop conditions were 60% Good-to-Excellent vs 60% last week, and 61% a year ago.  Maturity is 97% vs 94% last week, and 97% a year ago.  Scarcity of fertilizers is causing headaches for farmers in parts of South America.  Growers in the Center-West and Matopiba regions have been reporting that some fertilizer and glyphosate deliveries have been canceled by suppliers, creating a backlog of planting progress with the biggest concern for winter-corn crop as most farmers haven’t bought crop nutrients yet.   In Brazil, AgRural reports summer corn seeding is 45% complete, vs 38% a week earlier and 44% in previous year.

SOYBEANS

The soy complex is firm this morning with Nov beans up 6 cents to 12.27.  The contract edged out Monday's session high overnight, putting the contract on track for a fourth consecutive day of gains.  U.S. bean harvest is 60% complete as of Sunday, up 11 points from last week and 5 points ahead of the 5-year average of 55%.  Soybean leaf drop is 95% vs 91% last week, and 96% a year ago.  Brazil's soybean planting is 22% complete as of October 14, according to AgRural.  This is the second fastest pace on record.  Planting was at 10% a week earlier, and 8% a year before.  Moisture levels in the soil and good weather are helping to boost planting.  Soymeal is up 3.50 per ton this morning, soyoil firm.  Chinese Jan beans were down 35 yuan overnight; Soymeal down 32; Soyoil up 114; Palm oil up 118; Corn up 5.  Malaysian markets are closed for holiday. 

WHEAT

Wheat futures are firm this morning with Dec Chicago and KC contracts up 7 cents to 7.43-1/4 and 7.56, respectively as large pennant formations on the charts highlight consolidation within a generally bullish market.  Dec MPLS made a new high of 9.76-3/4 overnight amid a 9 cent gain.  A plunge in the dollar overnight aided overnight gains.  U.S. winter wheat planted is 70% vs 60% last week, and 76% a year ago.  Emergence was pegged at 44% versus 31% last week and the 5-year average of 47%.  Some Oklahoma growers were finishing up the planting of the wheat crop they will harvest in the summer of 2022.  Spot basis bids for HRW wheat were flat at grain terminals across the southern U.S. Plains on Monday amid slow farmer sales, according to grain dealers said.

CATTLE

Cattle futures are called steady to lower.  Futures finished lower in a quiet session to start the week, supported by the prospects of improved retail demand going into the Holiday season, but cautious overall of the direction of cash trade and outside markets.  The lack of follow through to start the week was disappointing, and a weak close could signal that cattle may be at the top of the range.  Prices are starting to trend higher, but prices may be more choppy in the near-term.  December remains around  the $130 price level, and but failed to push higher after a strong close last week.  Cash trade stayed typically quiet on Monday as show lists and bids are still being put together.  The majority of cash trade will likely hold off until the second half of the week.  Midday retail values were mixed, but were negative at the close.  Choice carcasses slipped .15 to 280.09, but Select lost .81 to 259.81.  The load count was light at 115 loads.  Feeder cattle traded lower across the complex. The premium of the futures to the cash index limited the front end of the market. The Feeder Cash Index has been trending lower, but still holds a large discount to the front-month Oct futures.

HOGS

Hogs are called steady to higher after starting the week with moderate gains on short covering.  December hogs tried to climb higher, but stayed mostly range bound with a mid-range close on Monday.  Direct cash trade was mixed to firmer on the Monday close.  Carcass based prices were .09 lower, but live pricing was $1.11 higher.  The strong cash close should support the opening today.  The Lean Hog Index traded 1.23 lower to 87.52 trying to tighten the gap with the December contract.  The premium to Dec hogs should help support the front of the market, trading at 8.840 today.  At midday, the retail pork carcass sector was firmer, gaining 5.84, but the market lost those gains, dropping to a close of .54 lower to 100.78 on moderate movement of 344 loads.  An improvement in both cash prices and retail carcasses would go along way of bringing buyers back to the hog market.  Technically, the uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner. 

Top Farmer Closing Commentary 10-18-21

Grain - Farming etienne-girardet-_Fp3YZ7lt-Y-unsplash

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CORN HIGHLIGHTS: Corn futures firmed today, finishing near the high of the day, gaining 7 cents in December to close at 5.32-3/4 and 4-3/4 cents in Dec 2022 to end the session at 5.27-3.4. Higher energy prices and stronger ethanol margins, as well as short covering helped to buoy prices today. Today’s trade activity was impressive considering expectations are for 55% of the crop to be harvest as of Sunday and a week of good harvest weather is expected.

Export inspections at 38.4 mb were termed neutral. As the gulf becomes more operational, we expect increased sales and inspections. Total sales are estimated at 2.5 bb. Inspections year-to-date are just over 160 mb, a pace that currently would not meet the USDA sales projection. It is early in the season and between the gulf slow-down and end users switching to a buy as needed practice we are not surprised to the slow start of the inspection year. Wheat prices edged higher and remain supportive as does the concern that new crop corn prices are not high enough to reflect fertilizer costs. Yet, the upside is likely limited as farmer selling will pickup if prices move much higher. Over head resistance is first at the 60-day moving average, 5.36, and then at 5.50 a level prices failed to breach in late September and early October. New crop will likely need to reach 5.50 in order to encourage enough panting for 2022.

SOYBEAN HIGHLIGHTS: Soybean futures edged higher today, closing firmer for the third consecutive session. November gained 3-3/4 to close at 12.21-1/2. Strong gains in soybean oil after palm oil made new contract highs and longer-term implications of growing demand from biodiesel prospects provided support, as did the idea farmers are quickly moving in the direction of finishing harvest. A strong weekly export inspections figure was also viewed as supportive, confirming loadings at the gulf are close to resuming full capacity.

Export inspections at 84.4 mb were well above weekly projections to meet the current USDA total sales expectations of 2.090 bb. The 10-day moving average acted as over-head resistance. 65% of the crop is expected to have been harvested as Sunday. A week of good harvest weather should have many finishing soybeans. The likeliest scenario we see developing is rangebound between 12.00 and 12.50 until more news gathered regarding China, South American weather, and export sales. For now, farmer selling is slow on price dips and end user buying is picking up. We are concerned that new crop (2022) could come under pressure on expectations of more acreage due to sky-rocketing fertilizer costs.

WHEAT HIGHLIGHTS: Wheat futures ended the session with modest gains, still riding the coattails of last week’s WASDE report. Dec Chicago wheat gained 2-1/4 cents, closing at 7.36-1/4 and July up 1-3/4 at 7.40. Dec KC wheat gained 5-1/4 cents, closing at 7.49 and July up 4-1/4 at 7.50.

This morning, most markets were down on news that China’s Q3 GDP data was lower than expected. This offered some weakness to global equity markets and likely rippled through to other markets. Wheat did manage to recover and though Chi and KC wheat did manage to close higher today, the gains were moderate. The recent star of the wheat complex, Minneapolis, did not perform as well today, with losses of a penny or two. That contract did manage to make nine year highs last week, and the approach towards the $10 mark should help support Chi and KC. Paris milling wheat futures also continue to make new highs, though the gains were not held into the close of trading. Rumors continue to circulate that last week China bought up to 10 cargoes of French wheat, with a smaller purchase of US SRW wheat to boot. In Russia, wheat export prices are higher for the 13th consecutive week. Currently the managed funds are net long Minneapolis and KC, but net short Chi wheat. The La Nina weather pattern is intensifying and will likely produce drier than normal weather conditions in 2022 across the US Southern Plains.

CATTLE HIGHLIGHTS: Cattle futures finished lower in a quiet trading session to start the week, supported by the prospects of improved retail demand going into the Holiday season, but cautious overall of the direction of cash trade and outside markets.  Oct. cattle lost .525 to 125.400, and Dec cattle dropped .550 to 130.425.  Feeder cattle finished lower, with Oct feeders 1.825 lower to 155.750. 

December stays held in around  the $130 price levels, and but failed to push higher after a strong close last week.   Cash trade stayed typically quiet on Monday as show lists and bids are still being put together.  The majority of cash trade will likely hold off until the second half of the week.  Midday retail values were mixed, but the firming tone that started at the end last week supported the market.  Choice carcasses slipped .29 to 279.95, but Select added .83 to 261.45. The load count was light at 47 loads. The afternoon close in retail prices will have a big impact on the start of the trading session on Tuesday.  Feeder cattle traded lower across the complex. The premium of the futures to the cash index limited the front end of the market. The Feeder Cash Index has been trending lower, but still holds a large discount to the front-month Oct futures. The weak tone in the live cattle markets helped pressure feeders, and the grain markets catching a bid today, help add to the selling pressure.  The lack of follow through in the cattle market to start the week was disappointing, and a weak close could signal that cattle may be at the top of the range.  Prices are starting to trend higher, but prices may be more choppy in the near-term, and watching the fundamentals closely.

LEAN HOG HIGHLIGHTS: Hog futures finished higher to start the week with moderate gains.  Short covering led as prices consolidated, trying to push higher.   Dec hogs are now the new lead month contract, gained .950 to 78.275, closing higher for the first time in 5 sessions. 

December hogs tried to climb higher, but stayed mostly rang bound with a mid-range close on Monday.  The market is still eying the gap on the charts.  The top of that gap is  at 77.200 on the Dec futures, with Wednesday low at 77.250.  That gap could fill this week, but the consolidation may keep the gap open.  Cash market will still be a key to the hog market overall.  Direct trade on Friday closed softer, and that limited gains for the session today.  The Lean Hog Index traded 1.23 lower to 87.52 trying to tighten the gap with the December contract.  The premium to Dec hogs should help support the front of the market, trading at 8.840 today.  At midday, the retail pork carcass sector was firmer, gaining 5.84 to 107.16 on good movement of 156 loads.  The improvement is both cash prices and retail carcasses getting some footing would go along way of bringing buyer back to the hog market. Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner.  The cash market may be the keys for a true turn higher in prices.

Top Farmer Midday Update 10-18-21

Grain - Large soybean field on a sunny day

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CORN

  • Dec up 3 @ 5.29
  • Corn has held support over $5.00 but we need to see more export demand
  • US corn export prices are currently the cheapest feed grain in the world
  • Ethanol margins are still positive
  • Funds sold 22,030 contracts leaving them net long 148,925 contracts
  • 55% of corn is expected to be harvested on this afternoon’s crop progress report

SOYBEANS

  • Nov up 4 @ 12.22
  • Record highs in Malaysian palm oil overnight
  • Argentina is turning dry as La Nina begins to take effect
  • Mato Grosso, Brazil is reported to be 45% planted (vs a 5 year average of 25%)
  • Higher crude oil is helping the soybean oil market
  • 65% of soybeans are expected to be harvested on this afternoon’s Crop Progress report

WHEAT

  • Dec wheat down 1 @ 7.33, Dec KC up 2 @ 7.46, Dec MNPLS down 1 @ 9.68
  • MPLS wheat made a 9 year high on Friday – could help support Chi and KC
  • Current EU stocks to usage estimate at 7.44% - the lowest since 2013-2014
  • Funds are net long MPLS and KC wheat but net short Chi wheat
  • US wheat ending stocks are the lowest in 13 years
  • La Nina will likely create drier than normal conditions in 2022 across the US southern Plains

CATTLE

  • Dec LC down 0.350 @ 130.625 & Apr FC down 0.925 @ 163.625
  • The next Cattle on Feed report will be released on Friday
  • Boxed beef prices may be near support levels
  • Gains late last week may indicate further strength this week
  • Choice cuts down 0.08 and select down 0.06
  • Cattle slaughter projected at 120K
  • CME Feeder Cattle Index for 10/15: down 0.66 @ 153.35

HOGS

  • Feb hogs up 0.525 @ 81.850 & Feb pork cutout @ 92.425
  • The gaps on the charts have yet to be filled completely
  • Hog supplies remain substantial enough for packers to buy without bidding up
  • National Direct Afternoon report declined 0.96
  • Hog slaughter projected at 475K
  • CME Lean Hog Index for 10/18: down 1.23 @ 87.59

TFM Sunrise Update Oct 18, 2021

Grain - A hand scooping soybeans

CORN

Corn futures traded quietly overnight around Friday's higher closing range.  For December corn, the overnight trading range was 2-3/4 cents from 5.27 to 5.24-1/4.  The dollar is up and crude is making a new high to begin the week.  We'll get an update on harvest progress after the close today.  For now, the corn market is trying to find some grounding after a bearish USDA Supply/Demand report sunk the prices.  Weekly Export Inspections will later this morning will give traders some ideas into last week's shipments.  Technically, December corn is trading squarely within a consolidative pattern between 50-day and 200-day moving averages, at 5.35-1/2 and 5.20, respectively. 

SOYBEANS

The soy complex was mixed overnight with Nov beans down 2 this morning to 12.15-3/4, Dec meal off 80 cents per ton to 315.80; and Dec bean oil up .15 to 61.44.  As South American weather begins to play a bigger role in price outlook, so far, rains in Brazil and Argentina are helping crops get off to a good start.  More showers are needed for soybean planting and establishment in Argentina, though.  The U.S. soybean crush hit a three-month low in September and fell below an average of trade estimates, while soyoil stocks at the end of last month rose for a third straight month, according to NOPA data released on Friday.  Last week's low of 11.84-1/2 is a bearish target for the November bean contract as bullish traders try to keep the market trading above $12.00.  Overnight, Chinese Jan bean futures were up 30 yuan ; Soymeal down 9; Soyoil up 154; Palm oil up 176; Corn down 4;  Malaysian palm oil prices were up 86 ringgit (+1.73%) at 5047 hitting a fresh record high as stronger petroleum prices and soybean oil futures increase its appeal as an alternative to biofuel.

WHEAT

Wheat futures are firm this morning with Dec Chicago and KC contracts up a penny to 7.35 and 7.44-3/4.  Dec MPLS spring wheat is unchanged at 9.68-3/4, mid range of Friday's trading range that included a contract high 9.80, supporting the entire complex.  Underlying support stems from lingering concerns over the drought could spell for next year.  In addition, U.S. HRW 2022 prices are competitive on the global market.  The Ethiopian Trading Business Corporation is seeking 400,000 tons of milling wheat, the agency said in a tender notice on its website.  Export prices for Russian wheat rose to a nine-year high, the Sovecon analytical firm reported today.  Euronext wheat extended a rally on Friday to set new contract highs as rumors of further sales of France's crop to China underscored strong demand and tightening availability in Europe.

CATTLE

Cattle futures are called steady to higher as December live cattle re-challenge the $130 price level after finishing last week at the top of the trading range.  This could open the door for additional follow through buying strength to start the week.  Cash trade saw moderate to active trade occurred in the North at mostly $124 live with a few up to $125, and mainly $196 dressed, steady to $2 higher compared to the prior week.  Trade in the South was moderate to active at primarily $124, steady/firm versus the previous week.  Carcass values' rate of decline slowed from past weeks, with Choice boxes losing $4.98 and Select declining $3.76.  This would indicate the cutout is near a low before the Holiday season.  Feeder cattle have been lower across the complex.  The Feeder Cash Index traded at 153.35, down .66 and a $4.2250 discount to the front-month Oct futures.  We view the market may be building into a trading range, and searching for direction overall, but the high-range close on daily and weekly charts should support the market next week on Monday.

HOGS

Hogs are called mixed.  Futures finished higher to end the week with moderate to strong gains.  Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner.   Short covering led by a turn higher in Thursday direct closing cash prices helped support.  December consolidated on Friday, despite the gains, traded within Thursday’s range.  The top of the gap on Dec is  at 77.200, with Wednesday's low at 77.250.  That gap could fill this week, but the consolidation may prolong smoothing out the chart.  Cash markets had a firm close on Thursday, supporting the market to end the week, but direct trade on Friday’s close was softer, with carcass based pricing trading $.96 lower, and direct live prices were $1.08 lower.  The cash market will be key for price direction this week.  The Lean Hog Index traded .91 lower to 88.82 trying to tighten the gap with the December contract.  The premium to Dec hogs should help support the front of the market, trading at 10.545.  Friday's closing pork carcass values were lower, with carcasses losing 4.74 to 101.32 on good movement of 334 loads. 

Top Farmer Closing Commentary 10-15-21

Grain - Large cornfield with rows of crop

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CORN HIGHLIGHTS: Corn futures firmed today gaining 6 to 9 cents on good export sales and a broad-based rally in most commodities including crude oil which traded above 82.00, a new contract high for November futures. December futures closed at 5.25-3/4 up 9 cents for the day and off 4-3/4 cents on the week.

What started as a risk-off week in commodities, ended with risk on. Export sales were released today (normally on Thursday but due to Columbus Day, shifted back one day) at 40 mb were termed supportive bringing year-to-date sales to 1.087 bb, as compared to 1.043 at this same time last year. The total sales forecasted by the USDA are 2.5 bb which implies sales are now 43.5% of the projected total. Soaring fertilizer costs and supply concerns have many speculating as to what this could mean for corn acreage in the year ahead. At this point, a number that keeps surfacing is 3,000,000 acres shifted from soybeans to corn. Really, this is anybody’s guess but a reduction of three million acres could tighten carry out toward 1 billion. This would suggest $5 as support for new crop with little weather premium priced in. Other dynamics are input availability such as herbicides and pesticides. This may be a challenge for Brazil and Argentina as well.

SOYBEAN HIGHLIGHTS: Soybean futures ended the week on a firm note, with November futures leading a rally today closing 11-1/2 cents higher at 12.17-3/4. For the week though, November still lost 25-1/4 cents. New high prices for crude oil and a strong weekly export sales figure at 42.2 were supportive. Additionally, announced daily export sales this morning totaling just over 34 mb to China and unknown destinations suggests that futures have gone low enough to spark importing countries to pick up their purchasing pace.

Total sales year-to-date are now 970 mb, well behind 1.584 bb for this same time a year ago. Nonetheless, the trend of exports is picking up in recent weeks. Total sales expectations for the year are 2.090 bb which puts year-to-date sales at 46% of expectations. The gulf should be close to full capacity by the end of the month. The dollar was off again for the third consecutive session. Palm and soybean oil are in strong demand due to tightening vegetable oil supplies and perhaps more importantly increasing biodiesel production. Yield results continued to suggest most are harvesting as expected or better than expected yield.

WHEAT HIGHLIGHTS: Wheat futures rallied today on rumors of China buying, as well as supportive fundamentals. Dec Chicago wheat gained 9-1/4 cents, closing at 7.34 and July up 9 at 7.38-1/4. Dec KC wheat gained 12-3/4 cents at 7.43-3/4 and July up 10-1/4 at 7.45-3/4.

Minneapolis wheat led the way yet again today, reaching a December contract high of 9.80. Paris milling wheat futures are also up the equivalent of 17 cents per bushel, making new highs. Interestingly, Dec Chi wheat ended the week exactly where it started at 7.34 – a nice recovery considering the poor start to the week. Fund selling pushed the market down early after the WASDE report but bullish fundamentals have helped wheat to rebound. Unlikely to change much over the coming months are US wheat supplies which are at 14-year low levels. Rumors yesterday said that China bought 5-6 cargoes of French wheat; some sources say it may be up to 10 cargoes. US 2022 HRW wheat prices are competitive to Europe and the Black Sea. At the current pace, Europe’s wheat exports would be somewhere around 47 mmt. This would suggest a negative carryout (around -2 mmt). Therefore, the market is looking to see a decline in European exports, along with Russia’s export reduction due to their soon to be implemented quota system. The USDA reported an increase of 20.9 mb of wheat export sales, though total wheat commitments are down 20% from one year ago. Drought could remain a concern into 2022 and is just one factor supporting prices.

CATTLE HIGHLIGHTS: Cattle futures saw follow through buying support, as a firmer retail carcass values and a second strong day in equity markets brought some buying strength into the cattle markets.  Oct. cattle gained .225 to 125.975, and Dec cattle added .675 to 130.975.  Feeder cattle finished failed to move higher, with Oct feeders .850 lower to 157.575.  For the Week, Dec Live Cattle gained .725, and October feeders were -1.900 lower.

Outside markets were an influence, as equity markets pushed strongly higher bringing some “risk-on” trade into the cattle complex. December is back challenging the $130 price levels, and finished the week at the top of the trading range, which could open the door for additional follow through buying strength next week.   Most likely cash trade will be put together for the week, with the exception of some clean up trade on Friday. Most trade was capture at the $124 live/$196 dressed levels, mostly steady with last week.  Midday retail values were firmer, supporting the market. Choice carcasses gained 0.97 to 281.29, and Select added .80 to 261.48. The load count was light/moderate at 101 loads. The firm tone in the retail sector helped support prices into the end of the week.  Weekly export sales posted new net sales of 15,700 MT reported for 2021 were up 1% from the previous week, but unchanged from the prior 4-week average. Top buyers of U.S beef last week were Japan, China and South Korea.  Feeder cattle traded lower across the complex. The premium of the futures to the cash index limited the front end of the market. The Feeder Cash Index traded at 153.35, down .66 and a $4.2250 discount to the front-month Oct futures. The strong tone in the live cattle markets help support feeders, but the grain markets catching a bid today, added to the selling pressure.  The cattle market may be building into a trading range, and may be looking for direction overall, but the high-range close on daily and weekly charts should support the market next week on Monday.

LEAN HOG HIGHLIGHTS: Hog futures finished higher to end the week as prices saw moderate to strong gains.  Short covering led by a turn higher in Thursday direct closing cash prices helped support.  Dec hogs are now the new lead month contract, gained .950 to 78.275, closing higher for the first time in 5 sessions.  For the week, Dec hogs lost 3.225 in a pressured week.

December consolidated on Friday, despite the gains, traded within Thursday’s range.  The market is still eying the gap on the charts.  The top of that gap is  at 77.200 on the Dec futures, with Wednesday low at 77.250.  That gap could fill next week, but the consolidation may keep the gap open.  Cash market had a firm close on Thursday, supporting the market today.  Direct trade on Thursday’s close, with carcass based pricing trading $.14 higher, and direct live prices were $2.46.  Follow through cash strength will be key for price direction next week. The Lean Hog Index traded .91 lower to 88.82 trying to tighten the gap with the December contract.  The premium to Dec hogs should help support the front of the market, trading at 10.545 today.  At midday, the retail pork carcass sector was softer, losing 1.07 to 104.99 on good movement of 211 loads. Weekly export sales were strong at 33,500 MT reported for 2021 were up 51% and 9 % from the prior 4-week average. Japan, Mexico and China were the top buyer in U.S. pork last week. Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner.  The cash market may be the keys for a true turn higher in prices.

Top Farmer Midday Update 10-15-21

Grain - Farming etienne-girardet-_Fp3YZ7lt-Y-unsplash

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CORN

  • Dec up 8 @ 5.25
  • Brazil corn crop plantings are increasing – conditions are favorable due to recent rains
  • France’s corn harvest is 15% done vs 62% average
  • Ukraine corn harvest is 22% done – looks like they will have a 39 mmt crop
  • January corn on China’s Dalian exchange is near the equivalent of $10.09 per bushel

SOYBEANS

  • Nov up 11 @ 12.17
  • 20% of China’s soybean crushers have downtime due to coal / electricity shortages
  • Talk that in the near future US soybean crush capacity will increase for green fuel and soybean oil
  • November soybeans on China’s Dalian exchange are around the equivalent of $18.89 per bushel
  • USDA reported an increase of 42.2 mb of soybean export sales

WHEAT

  • Dec wheat up 12 @ 7.37, Dec KC up 15 @ 7.46, Dec MNPLS up 16 @ 9.76
  • US HRW wheat 2022 prices are competitive to Europe and the Black Sea
  • At current pace, Europe’s wheat exports would be 47 mmt
  • Drought could remain a concern into 2022
  • Rumors yesterday that China bought 5-6 cargoes of French wheat

CATTLE

  • Dec LC up 0.275 @ 130.575 & Apr FC down 1.175 @ 164.125
  • A strong stock market could lead to better beef demand as traders have more faith in the economy
  • Cattle futures have rebounded from some of their recent losses
  • Boxed beef may have found a bottom
  • Choice cuts up 0.30 and select up 1.98
  • Cattle slaughter projected at 109K
  • CME Feeder Cattle Index for 10/14: down 0.25 @ 154.01

HOGS

  • Feb hogs up 0.850 @ 81.150 & Feb pork cutout @ 92.775
  • There is still a gap below current levels, but it was almost filled yesterday
  • Once the gaps are filled, traders may be more willing to buy
  • Packers remain nonaggressive due to ample supplies
  • National Direct Afternoon report increased 0.14
  • Hog slaughter projected at 474K
  • CME Lean Hog Index for 10/15: down 0.91 @ 88.82

TFM Sunrise Update Oct 15, 2021

Grain - A hand scooping soybeans

CORN

Corn futures traded higher overnight, posting a 7-1/2 cent gain to 5.23-3/4 in the nearby December contract.  Some short profit-taking is noted heading into the weekend following a negative reaction to the latest USDA data.  Funds remain net long near 140,000 corn contracts as harvest slows in some areas due to rain.  Weekly export sales will be released today, due to the Columbus Day Holiday last Monday.  Trade estimates range from 250,000 to 500,000 tons.  For the week, Dec corn is down 7 cents, but supported by being the world's cheapest supply-line.  Basis bids for corn shipped by barge to the U.S. Gulf Coast strengthened on Thursday, buoyed by rising costs for barge freight.

SOYBEANS

The soy complex was higher overnight with Nov beans up a dime to 12.16-1/4, meal up $3 per ton; And, soyoil up .57.  Weekly export sales will be released today, due to the Columbus Day Holiday last Monday.  Trade estimates range from 600,000 to 1.40 mil tons for beans, 100,000 to 320,000 tons for meal; And (5,000) to 30,000  for soyoil.  For the week, Nov beans are down 26-1/2 cents.  Nov 2022 beans have traded lightly this week and are at 12.20, down 29 cents for the week while falling through their 3-month sideways trading range.  Soaring fertilizer prices could lead farmers to switch about 3 million acres of corn to soybeans, according to Patricia Luis-Manso, head of agriculture and biofuels analytics for S&P Global Platts.  Overnight, Chinese Jan beans were down 75 yuan ; Soymeal up 27; Soyoil up 52; Palm oil down 22; Corn up 19.  Malaysian palm oil prices overnight were up 88 ringgit (+1.80%) at 4965 bouncing back from its worst daily loss in almost four weeks as higher petroleum prices and firm soybean oil futures increased the appeal of the tropical oil as an alternative, especially in biofuel.

WHEAT

Dec Chicago wheat futures rose a dime overnight to 7.34-3/4 and is unchanged for the week.  Dec KC was up 11-3/4 cents to 7.42-3/4 and is up a nickel for the week.  Dec MPLS gained 7-1/2 cents to a new contract high of 9.67-1/2 after gaining 21 cents on the week.  Trade estimates for Weekly export sales are 250,000 to 500,000 tons.  The Ethiopian government issued an international tender to buy about 300,000 tons of milling wheat.  Winter wheat prices are consolidating in the big scheme of things while catching a bid at week's end amid rising open interest.  The dollar is down for the week, but trading in its new higher range, thus putting pressure on wheat prices.  In addition, USDA, this week tightened U.S. and World Ending Stocks at a juncture in time where Iran increased import intentions and China raised minimum purchase prices for 2022 wheat. 

CATTLE

Cattle futures are called steady to higher following a rebound on Thursday as a firmer retail tone and a strong equity markets brought some buying strength into the cattle markets.  Outside markets were an influence, as equity markets rebounded strongly, bringing some “risk-on” trade into the cattle complex.  The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the back months.   December is back challenging the $130 price levels, which could limit the upside.  Cash trade saw more light to moderate trade on Thursday.  Bids were consistent if not firmer in some regions at $124, which has caught the majority of the trade for the week at this point.  Most likely cash trade will be put together for the week, with the exception of some clean up trade today.  Midday retail values were firmer, supporting the market, and most of those gains into the close.  Choice carcasses gained 0.30 to 280.32, and Select added 1.98 to 260.68. The load count was light/moderate at 143 loads.  Feeder cattle traded higher across the complex.  The premium of the futures to the cash index limited gains on the front end of the market.  The Feeder Cash Index traded at 154.01, down .25 and a $4.415 discount to the front-month Oct futures.  If carcass values can push higher, that will lift the market.

HOGS

Hogs are called mixed to higher.  Weak price action led by the soft fundamentals was noted yesterday.  Oct hogs finished their trading life at 88.200.  December faded through the day, and still seems to be targeting the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is  at 77.200, with Wednesday's low at 77.250.  That gap will likely fill today, given the weak price action on Thursday, as Dec hogs has closed lower 9 out of the past 10 days.  Cash markets still hold a softer tone.  Direct trade did rebound on Thursday's close, with carcass based pricing trading $.14 higher, and direct live prices were $2.46 higher.  The higher trade should help support the market open.  The Lean Hog Index traded 1.21 lower to 89.73 trying to tighten the gap with the October.  The premium to Dec hogs should help support the front of the market, but the overall selling pressure has been too strong lately.  At midday, buying prevailed in the retail pork carcass sector, and the market held some of those gains into the close, gaining 1.21 to 106.06 on good movement of 422 loads.  Weekly export sales will be released today, due to the Columbus Day Holiday.  Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner.

Top Farmer Closing Commentary 10-14-21

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CORN HIGHLIGHTS: Corn futures rebounded, finishing the session with gains of 2 to 4-1/2 cents on a “risk on” day in commodities and equities. After pushing lower early in the week, a lack of farmer selling, a weaker dollar, stronger ethanol grind and new high prices for spring wheat were all viewed as supportive for corn futures today.

December futures led today’s rally gaining 4-1/2 cents, closing at 5.16-3/4. Rain delays are causing some harvest issues, but overall, this season’s harvest continues to run a faster than normal pace. Corn has dried in the field as is one of the driest crops harvested in recent memory. Feedback continues to suggest the crop is running slightly better than expected. Worries the economy could be slowing and affected by supply chain disruptions and inflation might suggest less demand for items such as beef and pork. Put another way, downward revisions to feed usage. Today’s ethanol stats indicated production increased from6.846 million barrels last week to 7.224 this week. Stocks at 19.847 million barrels was down from last weeks 19.931. Corn used this past week was the highest since June at 104.768 mb. Export sales will be released tomorrow due to the one-day delay from Columbus Day.

SOYBEAN HIGHLIGHTS: Soybean futures recovered gaining 11 cents in November on another announced export sale of 132,000 ton for unknown destinations, a weaker dollar and firmer energy all provided support. A buy signal due to a crossover in stochastics in over-sold territory also added support.

Export sales will be released tomorrow. Any sale of over 100,000 metric tons is announced the day of the sale. It will be interesting to see if a cumulative effect of smaller sales will show a response to lower prices. If there is a surprise lurking, it could be end users are stepping up to the plate. Though carry out is twice what it was 60 days ago, it is still snug. We don’t believe today’s trade activity was sending a signal that prices are done declining, yet we were impressed with the way prices finished near the top of today’s trading range. Soymeal could be indicating it’s close to a price bottom gaining 4.00 today. Soybean oil also finished with solid gains of 60 to 85 cents. Soy oil continues to find support on tight world vegetable supplies. India is reducing import tariffs. Beneficial rains in South America are noted for this week.

WHEAT HIGHLIGHTS: Wheat futures had solid gains today, as most markets tried to recover from yesterday’s selloffk, with wheat behaving more in accordance with the WASDE report numbers. Dec Chicago wheat gained 6 cents, closing at 7.24-3/4 and July up 2-1/2 at 7.29-1/4. Dec KC wheat gained 9-1/4 cents, at 7.31 and July up 7-1/2 at 7.35-1/2.

Along with corn and soybeans, wheat made a recovery today. MPLS wheat was able to make another new contract high. The US Dollar losing some ground was also helpful to wheat prices. For the 13th week in a row, Russian wheat values have increased. The Russian wheat harvest is 95% done, with 76.4 mmt reported to be harvested. The USDA has the Russian crop pegged at 72.5 mmt – either they are too low in their estimate, or they are factoring in the reduction that is caused by cleaning and drying the crop. Paris milling wheat futures are also sharply higher after losses yesterday. Today there were rumors that China is buying 5-6 cargoes of French wheat. Iran’s ag minister stated that they would need to buy 294 mb of wheat due to terrible drought in that region of the world. US weather-wise, SRW wheat areas are getting rain and HRW wheat areas should remain mostly dry for the next week. Drought could remain a concern into 2022 and with a 14-year low in US wheat supplies this could be a major issue next year.

CATTLE HIGHLIGHTS: Cattle futures rebounded on Thursday, as a firmer cash bid tone and a strong equity markets brought some buying strength into the cattle markets.  Dec cattle gained 1.300 to 130.300, and Oct cattle added .975 to 125.750.  Feeder cattle finished higher as well with Nov feeders 1.175 higher to 162.150.

Buyers stepped back into the cattle market on Thursday, lifting prices.  Outside markets were an influence, as equity markets rebounded strongly, bringing some “risk-on” trade into the cattle complex. The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the deferred contracts.  December is back challenging the $130 price levels, which could limit the upside.  Cash trade saw more light to moderate trade on Thursday.  Bids were consistent if not firmer in some regions at $124, which has caught the majority of the trade for the week at this point.  Most likely cash trade will be put together for the week, with the exception of some clean up trade on Friday.  Midday retail values were firmer, supporting the market. Choice carcasses gained 0.67 to 280.69, and Select added 2.35 to 261.05. The load count was light/moderate at 71 loads. Weekly export sales will be announce tomorrow, a day late due to the Columbus Day Holiday on Monday. Feeder cattle traded higher across the complex. The premium of the futures to the cash index limited gains on the front end of the market. The Feeder Cash Index traded at 154.01, down .25 and a $4.415 discount to the front-month Oct futures. The strong tone in the live cattle markets help support feeders, despite grain markets catching a bid today. The cattle market may be building into a trading range, and may be looking for direction overall.

LEAN HOG HIGHLIGHTS: Hog futures finished marginally lower on Thursday, as weak price action lead by the soft fundamentals keep support limited on the day. Oct hogs finished their trading life today, closing at 88.200, .450 lower and Dec hogs were .825 lower to 77.325, now closing lower for 9 out of the past 10 sessions.

December faded through the day and still seems to be targeting the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is  at 77.200 on the Dec futures, with Wednesday low at 77.250.  That gap will likely fill tomorrow, given the weak price action on Thursday.  Cash market still holds a softer tone.  Direct trade was weak on Wednesday’s close, with carcass based pricing trading $.93 lower, and direct live prices were $2.09 lower.  The lower trade failed to support the market. The Lean Hog Index traded 1.21 lower to 89.73 trying to tighten the gap with the October contract with expiration today.  The premium to Dec hogs should help support the front of the market, but the overall selling pressure has been too strong lately. At midday, buying stayed in the retail pork carcass sector, gaining 5.64 to 110.49 on good movement of 258 loads. Weekly export sales will be released on Friday, due to the Columbus Day Holiday. Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, and will need some fundamental help to turn the corner.

Top Farmer Midday Update 10-14-21

Grain - Baked wheat bread sliced

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CORN

  • Dec up 2 @ 5.14
  • US rains have caused harvest delays the past couple of days
  • More rain expected for the eastern Corn Belt for the next two days
  • A La Nina weather pattern is expected this year – likely to bring dryness to South America
  • Funds remain net long 140,000 corn contracts
  • US corn is currently the world’s cheapest
  • It remains unknown how much corn China needs to buy

SOYBEANS

  • Nov up 3 @ 11.98
  • India cut their veg oil import tax from 2.5% to 0%
  • Palm oil is lower after making a new contract high
  • USDA reported yesterday that China bought 330,000 mt and unknown bought 198,000 mt of soybeans

WHEAT

  • Dec wheat up 6 @ 7.25, Dec KC up 9 @ 7.31, Dec MNPLS up 13 @ 9.62
  • Paris milling wheat futures are higher
  • Russian wheat harvest is 95% done – 76.4 mmt harvested
  • SRW wheat areas are getting rain
  • HRW wheat areas should remain mostly dry for the next week
  • Drought could remain a concern into 2022

CATTLE

  • Oct LC up 0.500 @ 125.275 & Oct FC down 0.050 @ 157.60
  • Bearish supply outlook for cattle
  • Cash cattle have traded steady this week
  • Boxed beef still showing weakness
  • Choice cuts down 10.5 and select down 2.65
  • Cattle slaughter projected at 120K
  • CME Feeder Cattle Index for 10/13: up 0.11 @ 154.26

HOGS

  • Oct hogs down 0.475 @ 88.175 & Oct pork cutout down 0.300 @ 105.550
  • The gap on the charts below current levels has not yet been filled but it is close
  • An ample supply of hogs means packers can purchase without bidding higher
  • National Direct Afternoon report declined 0.93
  • Hog slaughter projected at 477K
  • CME Lean Hog Index for 10/14: down 1.21 @ 89.73

TFM Sunrise Update Oct 14, 2021

Grain - Large pile of soybeans

CORN

Corn futures traded two-sided overnight from 5.15 to 5.11 in the December contract and are firm this morning.  A slight technical bounce is noted after the recent price drop, and a sharp pullback in the dollar is helping.  The nearby contract experienced follow-through selling yesterday Tuesday's USDA report to approach long-term support at $5.00.  The contract did close beneath the 200-day moving average, something it has not done since September of 2020 and could influence some additional long-covering as we move through the week.  A close under $5.00 will likely influence some notable downside follow-through, but until that mark is breached the market is stuck in its recent range.  Outside markets hold a more negative tone this week with the energy complex halting its recent rally while the Dollar Index reversed its up-trend the last 24 hours.  U.S. crude stocks as of Oct 8, will be released today and are expected to stay 60-65 mil barrels (14%) below last year.  Ethanol output and stockpile projections for the week ending Oct. 8 are 985,000 barrels per day and would be the second consecutive increase in production.  Stockpiles average estimate is 19.834 mil barrels vs 19.931m a week ago.  

SOYBEANS

Soybean futures were up  4 cents overnight in the November contract to 11.99-1/4.   The meal market has moved to an extensive oversold level as it tries to find some footing, and while soybean futures have broken hard as well, they did manage to close well off their lows yesterday.  Daily export demand will be watched closely for signals to fundamental support for beans.  Weekly Export Sales are pushed back to tomorrow morning due to the Government holiday Monday of this week.  U.S. soybean crushings likely fell to a three-month low in September, according to analysts polled ahead of a monthly NOPA report due tomorrow.  NOPA members, which handle about 95% of all soybeans processed in the US, were estimated to have crushed 155.072 million bushels of soybeans in September.  If realized, the figure would be down 2.4% from the 158.843 mil processed in August and down 4% from September 2020, when crushers processed 161.491 mil.  It would also be the smallest crush since June.  Soyoil supplies at the end of September were projected at 1.663 billion pounds.  If realized, the figure would be down 0.3% from 1.668 billion the prior month.  In addition, fund positioning is being monitored.  Overnight, Chinese Jan bean futures were down 101 yuan; Soymeal down 27; Soyoil down 52; Palm oil down 8; Corn down 18;  Malaysian palm oil prices fell 138 ringgit (-2.75%) at 4883.

WHEAT

Dec winter wheat futures in Chicago and KC were up a nickel overnight to 7.23-3/4 and 7.26-3/4, respectively.  Dec MPLS was up 3 to 9.51-3/4.  Prices are back near where the they started the month of October.  The complex is set for some rebound strength after tumbling while etching new daily lows for more than a week.  Volatility is high as outside markets, including neighboring row crop prices make their moves on inflationary concerns.  Declining momentum studies have slowed down mid-week with sub $7.00 price levels serving as pivot points for trend direction in winter wheat.  Isolated showers in the Pacific Northwest are still not enough to prevent delaying winter wheat establishment.  Cold temperatures this week are very unfavorable.  Scattered showers in the Central and Southern Plains are easing heat stress and favoring planting and establishment.  Elsewhere, favorable conditions for winter wheat planting and establishment are seen for most of Europe.  Mostly favorable conditions for winter wheat planting and establishment in Ukraine is noted, but more moisture is needed for Russia.  Favorable conditions for reproductive to filling winter wheat in Australia and southern Brazil is being reported.  More rain is needed in Argentina.  Favorable conditions are occurring for planting winter wheat in China.

CATTLE

Cattle futures calls lower on follow through selling led by a lackluster cash market and concerns over U.S. inflation data.  The soft price action will lead to some additional selling pressure as the cattle market may be building into a trading range, and may be working back toward the bottom of that range.  Outside markets were an influence, as the release of the Consumer Price Index, a measure of inflation, was at 5.4% year-over-year in September.  Cattle markets are concerned if inflation is elevated, consumer discretionary income would be less, cutting into U.S. consumer demand.  The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the deferred contracts.   Cash trade got a slow start on Wednesday, and early results were disappointing to the market.  Southern business was being completed at $122-124, and Northern dress trade at $196, fully steady with last week.  Midday retail values were lower, and that trend held into the close.  Choice carcasses lost 1.05 to 280.02,  and Select fell 2.65 to 258.70. The load count was light/moderate at 171 loads.  Feeder cattle traded lower across the complex.  The premium of the futures to the cash index weighed on the front end of the market.  The Feeder Cash Index traded at 154.26, up .11, and a $3.390 discount to the front-month Oct futures.

HOGS

Hogs are called mixed.  The market finished marginally lower on Wednesday, as the overall negative market tone, and lack of fundamental support limited the upside potential.  Technically, uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, an will need some fundamental help to turn the corner.  October hogs expire today, 10/14.  December softened off session lows, but still seems to be targeting the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is  at 77.200, with Wednesday's low at 77.600.  Like in cattle, the concerns of inflation leading to tighter consumer spending due to elevated costs weighed on the long-term hog futures.  Cash still holds a softer tone.  Direct trade has been mixed, but still overall soft.   The Index traded 0.66 lower to 90.94, trying to tighten the gap with the October contract's expiration.  The premium to Oct and Dec hogs should help support the front of the market, but the overall selling pressure was too strong on Wednesday.  Pork carcasses closed sharply lower on Tuesday afternoon, adding to the selling pressure on Wednesday.  At midday Wednesday trade, hog carcasses snapped back, gaining 7.26, and held some of those gains into the close, finishing 2.47 higher to 104.85 on good movement of 418 loads.

Top Farmer Closing Commentary 10-13-21

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CORN HIGHLIGHTS: Corn futures closed weaker on follow through from yesterday’s negative WASDE report and expectations for better harvest weather. A broad sell-off by mid-session in corn, soybeans, and wheat suggests that managed money may be reducing long positions.

December futures lost 10-1/4 cents to close at 5.12-1/4. Sharp losses in wheat and soybeans were noted, as well as creating spillover weakness. The USDA Crop Progress report indicated harvest is moving at a fast clip, despite recent wet weather. 41% of this year’s crop is harvested, 10% above the 5-year average. One of the aspects of a negative USDA report during harvest is that it sends a signal to end users that urgency in purchasing is not necessary. It is highly likely the investment community, which has been strongly long corn into the harvest season, looked at yesterday’s numbers and harvest pressure as a combination too strong to overcome and began to reduce long positions. Focus remains on harvest, but also on South American production. Reports continue to circulate outlining challenges Brazilian and Argentine farmers are experiencing securing inputs for production. The key now is to see whether this pullback generates an influx of interest from end users. We feel confident that corn futures near 5.00 will likely create little or no incentive for farmers to sell.

SOYBEAN HIGHLIGHTS: Soybean futures fished with losses of 3 to 7 cents on follow through selling after yesterday’s bearish USDA WASDE report and crop progress figures showing harvest is at 49% complete versus the five-year average of 40%. However, good news in the form of announced sales of 330,000 metric tons to China and 198,000 mt to unknown destinations may be signaling that prices have moved low enough to generate buying interest. These numbers added together are just under 20 million bushels. Not bad for one day.

The challenge for the bean market is the technical picture and perception of big production expectations in South America. While the close today was not all that negative, it still represented a bias toward weaker prices. With carryout well over 300 million and users not likely to be overly aggressive buyers, the overall expectation is for continued weakness. As indicated yesterday, we believe a percentage of farmers were cautious sellers despite high prices this summer as supplies remained critically tight and the market inverted. As the end of August and early September unfolded, expectations for yield began to rise and prices began sliding. As of late we think farmers added additional bushels into the pipeline opting to move soybeans and store corn. Soybean meal finished weaker again except for nearby March which gained 50 cents. Otherwise, the trend remains decisively lower. Soybean oil rebound it today once the energy market went from negative to positive.

 WHEAT HIGHLIGHTS: Wheat futures, along with the other grains, finished lower on a risk off day after trading higher early in the session. Additional price pressure may have developed on increased rainfall for the central Plains, helping to alleviate dry conditions. Dec Chicago wheat lost 15-1/4 cents, closing at 7.18-3/4 and July down 14 at 7.26-3/4. Dec KC wheat lost 18 cents, closing at 7.21-3/4 and down 16-3/4 at 7.28.

Most commodity markets seemed to struggle with lower closes, including grains livestock. With double digit losses in both Chi and KC wheat, it is a bit disappointing considering news has been mostly supportive. To recap from yesterday’s data: 60% of winter wheat is planted and the USDA reported wheat inspections at 16 mb. US 21/22 carryout is at 580 mb, down from 615 mb in September. This is the first time in eight years that wheat ending stocks are below 600 mb. World 21/22 ending stocks are also down 6 mmt from September at 277.2 mmt on yesterday’s report. These bullish numbers appear not to have been enough to overcome broad based commodity liquidation. Additionally, from a world outlook, the USDA did lower the Canadian crop but raised exports in the EU, India, and Australia to offset that. The big unknown will still be Russian exports – USDA kept them unchanged at 35 mmt even though Russia may soon implement export restrictions.

CATTLE HIGHLIGHTS: Cattle futures finished lower on follow through selling lead by a lackluster cash market and concerns over U.S. inflation data. Dec cattle lost .250 to 129.000, and Oct cattle dropped 0.250 to 124.775.  Feeder cattle finished lower with Oct .925 lower to 158.575.

After yesterday’s price weakness, the cattle market saw some follow through selling pressure, despite a strong pullback in grains.  Outside markets were an influence, as the release of the Consumer Price Index, a measure of inflation, was at 5.4% year-over-year in September.  Cattle markets are concerned if inflation is elevated, consumer discretionary income would be less, cutting into U.S. consumer demand.  The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the deferred contracts.  Cash trade has got a slow start on Wednesday, and early results were disappointing to the market.   Southern business was being completed at $122-124, and Northern dress trade at $196, fully steady with last week.  This was disappointing to the market, which was holding out for slightly firmer trade.  Midday retail values were lower, hold the recent trend.  Choice carcasses lost 0.76 to 280.31,  and Select fell 2.03 to 259.32. The load count was light/moderate at 101 loads. Daily slaughter stays consistent, and was estimated at 120,000 head, 1,000 under last week, as cattle supplies still seem ample to keep the cash market in check.  Feeder cattle traded lower across the complex. The premium of the futures to the cash index weighed on the front end of the market. The Feeder Cash Index traded at 154.26, up .11, and a $3.390 discount to the front-month Oct futures. Despite strong selling in the grain markets, the weakness across the cattle markets limited potential for upside gains. The soft price action will led to some additional selling pressure as the cattle market may be building into a trading range, and may be working back toward the bottom of that range.

LEAN HOG HIGHLIGHTS: Hog futures finished marginally lower on Wednesday, as the overall negative market tone and lack of fundamental support limited the upside potential. Oct hogs expired on 10/14 were 0.425 lower to 88.650, and Dec hogs were .025 lower to 78.150, now closing lower for 8 out of the past 9 sessions.

December softened off session lows, but still seems to be targeting the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is  at 77.200 on the Dec futures, with Wednesday low at 77.600.  Like in cattle, the concerns of inflation leading to tighter consumer spending due to elevated costs weighed on the long-term hog futures.  Cash market still holds a softer tone.  Direct trade was mixed on Tuesday’s close, with carcass based pricing trading $.49 higher, but direct live prices were $1.47 lower.  The mixed tone failed to support the market. The Lean Hog Index traded 0.66 lower to 90.94, trying to tight the gap with the October contract with expiration coming on Thursday.  The premium to Oct and Dec hogs should help support the front of the market, but the overall selling pressure was too strong on Wednesday. Pork carcasses closed sharply lower on Tuesday afternoon, adding to the selling pressure.  At midday, snapped back, gaining 7.26 to 109.64 on good movement of 242 loads. Weekly export sales will be released on Friday, due to the Columbus Day Holiday. Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Prices are now testing the bottom of the range, an will need some fundamental help to turn the corner.

Top Farmer Midday Update 10-13-21

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CORN

  • Dec down 14 @ 5.09
  • Corn crop is 41% harvested – USDA raised the crop rating to 60% good to excellent vs 59%
  • USDA reported corn inspections at 29.4 mb
  • USDA raised corn yield to 176.5 bpa from 176.3 bpa in September
  • US corn 21/22 carryout at 1.5 bb vs pre-report estimate of 1.421 bb and 1.408 bb in September
  • World corn 21/22 ending stocks at 3.017 mmt vs pre-report estimate of 298.4 mmt and 297.6 mmt in September

SOYBEANS

  • Nov down 7 @ 11.91
  • Soybean crop is 49% harvested – USDA raised the crop rating to 59% good to excellent vs 58%
  • USDA reported soybean inspections at 59.2 mb
  • USDA raised soybean yield to 51.5 bpa from 50.6 bpa in September
  • US soybean 21/22 carryout at 320 mb vs pre-report estimate of 289 mb and 185 mb in September
  • World soybean 21/22 ending stocks at 104.6 mmt vs pre-report estimate of 101 mmt and 98.9 mmt in September

WHEAT

  • Dec wheat down 17 @ 7.17, Dec KC down 19 @ 7.21, Dec MNPLS down 5 @ 9.50
  • 60% of winter wheat is planted
  • USDA reported wheat inspections at 16 mb
  • US wheat 21-22 carryout at 580 mb vs pre-report estimate of 581 mb and 615 mb in September
  • The 580 mb carryout is the first time in 8 years that ending stocks are below 600
  • World wheat 21/22 ending stocks at 277.2 mmt vs pre-report estimate of 280.9 mmt and 283.2 mmt in September

CATTLE

  • Oct LC down 0.150 @ 124.875 & Oct FC down 0.350 @ 158.225
  • USDA estimated an increase in beef production
  • Average cattle price for next year is $128.75
  • Choice cuts down 0.05 and select down 2.29
  • Cattle slaughter projected at 121K
  • CME Feeder Cattle Index for 10/12: up 0.53 @ 154.15

HOGS

  • Oct hogs down 0.500 @ 88.575 & Oct pork cutout down 1.600 @ 106.000
  • The gap on the charts below current levels is close to getting filled
  • Pork production is likely to decline as a result of tighter supply reducing slaughter amounts
  • National Direct Afternoon report was up 0.49
  • Hog slaughter projected at 477K
  • CME Lean Hog Index for 10/13: down 0.66 @ 90.94

TFM Sunrise Update Oct 13, 2021

Grain - A hand scooping soybeans

CORN

Corn futures traded two-sided overnight from 5.25-1/4  to 5.20-1/2 in the December contract and are on the weaker side this morning, down 1 to 2 cents. 200-day Moving Average support at 5.18-1/2 is holding the market together for the moment as traders continue to digest Tuesday's bearishly construed USDA report numbers.  The agency raised corn yield to 176.5 bushels per acre from 176.3 in September, upping the production forecast to 15.019 bil bu versus 14.996 a month ago.  Bigger-than-expected corn supplies point to reduced use for feed, meaning a bigger buffer on supplies than thought just a month ago.  U.S. Ending Stocks were 1.4 bil bu vs 1.408 bil.  Weekly Crop Ratings were also improved 1% to 60% Good-to-Excellent.  Corn harvest was pegged at 41% complete versus 29% last week and a 5-year average of 31%. 

SOYBEANS

Soybean futures were up overnight.  Nov beans rose as much as 13 cents to 12.11-1/4 before trimming gains to 12.07-1/2 this morning.  Soyoil recaptured Tuesday's losses overnight, and meal is down $2 per ton to a new low.  The Dec meal contract is now on pace to finish lower eight out of the last nine sessions while becoming technically oversold.  Tuesday's sharp losses in beans reflected a yield increase for this year to 51.5 bushels per acre, compared to 50.6 BPA only a week ago.  The market had been expecting a number closer to 51.1 BPA.  The increase raises U.S. bean production to 4.448 bil bu and ending stocks from 320 mil bu from 185 mil despite severely dry conditions in the northwestern U.S. Corn Belt as more resilient hybrid seeds have crops performing well even when conditions aren’t ideal.  Weekly Crop Ratings were improved 1% to 59% Good-to-Excellent.  Bean harvest was pegged at 49% complete versus 34% last week and a 5-year average of 40%.  With yesterday's new multi-month low(s) holding overnight, consolidation is a strong possibility as traders wait to see if China steps up purchasing commitments at arguably more globally competitive price levels.  Overnight, Chinese Jan beans were down 40 yuan ; Soymeal down 39; Soyoil down 82; Palm oil down 58; Corn up 17;  Malaysian palm oil prices were up 161 ringgit (+3.32%) at 5016 in a sudden surge of buying in late afternoon trading.

WHEAT

Wheat futures were mostly unchanged overnight, similar to post-USDA report closing ranges.  The October report held few surprise, so after posting and 'outside' trading day in many contracts, traders seem to have accepted a friendly report as being priced into the higher price levels.  Fewer-than-expected global wheat supplies were one of the few bullish surprises in the report and prices for the grain have moved higher.  USDA pegged world wheat stocks at 277.18 MMT, versus 282.22 mil a month ago.  U.S. Ending Stocks were trimmed to 580 mil bu from 615 mil a month ago.  Dec Chicago and KC wheat contracts are trading flat to 3 cents lower this morning at 7.34 and 7.37, respectively.  Dec MPLS spring wheat is fractionally higher to 9.55-1/2.  

CATTLE

Cattle futures calls are mixed to lower.  For the fourth day in a row, Live cattle prices failed to push through overhead resistance, and faded during the session on Tuesday.  The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the deferred contracts.  The weak price action on Tuesday will open the door technically for some additional downside pressure.  Cash trade has stayed quiet, but asking prices are $125-126.  Most likely, trade will hold of until the end of the week.  Midday retail values were lower, and stayed soft into the close, with Choice losing 0.05 to 281.07,  and Select fell 2.29 to 261.35.  The load count was light/moderate at 177 loads.  The Choice/Select spread widened to 19.72.  Daily slaughter was estimated at 120,000 head, 2,000 under last week, as cattle supplies still seem ample to keep the cash market in check.  Feeder cattle saw mostly higher trade, with the exception of October Feeders.  The Feeder Cash Index traded at 154.15, up .53, and a $4.425 discount to the front-month Oct futures.  Strong selling in the grain markets did help support the remainder of the feeder market overall on Tuesday.  Failure to push through resistance may have helped trigger selling pressure.  The soft price action will lead to some additional selling pressure unless the cash market moves higher to support the market.

HOGS

Hogs are called steady to weaker.  Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Key support levels gave way on Tuesday with Dec hogs failing to hold the $80 support level.  Traders may be eyeing the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is at 77.200 on the Dec contract.  The talk of the possibility of moving the processing lines back to a faster pace as negotiations between the USDA and plant workers groups are developing.  This could push extra supplies into the market place in the months ahead, if an agreement is reached.  The Lean Hog Index traded 0.35 lower to 91.60.  Holding a premium to Oct and Dec hogs should help support the front of the market, but the overall selling pressure was too strong on Tuesday.  Pork carcasses at midday traded lower, giving up the gains from Monday, and that pace accelerated into the close.  Carcasses lost 5.63 to 102.38, trading $10.00 off yesterday’s midday values.  The load count was moderate/strong at 434 loads, as buyers may look at the value in the pork product at these levels.

Top Farmer Closing Commentary 10-12-21

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CORN HIGHLIGHTS: Corn futures with losses of 6 to 10-14 cents on a less than favorable USDA WASDE and spillover from sharp losses in the soybean market where front month November dropped 30 cents.

December lost 10-1/4 cents, closing at 5.22-1/2 and December of 2022 gave up 6-1/4 to end the session at 5.21. Today’s USDA report indicated yield at 176.5 bushels per acre,.6 bushels more than the pre report estimate. Total production is now 15.019 billion. Carry out increased 79 billion bushels above the pre report estimate of 1.421 billion which compares to 1.408 in September. Feed usage dropped 50 million while ethanol remained unchanged at 5.2 billion. Exports rose 25 million two 2.5 billion. On the surface today’s numbers we’re not dramatic in change but when you add 100 million to carry out month to month, futures losing near 10 cents is expected. Funds were estimated to be long near 240,000 contracts prior to today’s report.

SOYBEAN HIGHLIGHTS: Soybean futures plunged 30 cents on a negative USDA Supply and Demand report and long liquidation reaching their lowest level since March 30. Carryout, at 320 mb, was 31 mb higher than the pre-report average estimate and 73% more than the September estimate of 185 mb.

November futures closed at 11.98-1/4, down 30 cents. To say the trend of carry out has changed is an understatement. In midsummer projected carryout was 115 million bushels and suddenly has gained 200 million. How did it get there? Increasing yield expectations this year, higher projected yield last year, and a lackluster demand market the past several months have prices on the defensive. Projected yield at 51.5 bushels per acre was .4 bushels larger than the average pre report estimate. World projected carry out for the 2020- 21 season increased 2.4 million metric tons above the pre report estimate of 287.4 million and for the year ahead increased 3.6 mmt above the estimate 104.6 mmt.

WHEAT HIGHLIGHTS: Wheat futures closed marginally higher on bullish report numbers. Dec Chicago wheat gained 2-1/4 cents, closing at 7.34 and March was up 1-3/4 cents to end the session at 7.47-1/4. Dec KC wheat gained 5-1/4 cents, closing at 7.39-3/4 and March was up 5 cents at 7.47-3/4.

What could have been a notable day for wheat turned out to be somewhat disappointing. Though ending the session with a gain, wheat closed about 6-10 cents off today’s highs. This inability to rally higher may have simply been due to spillover from a poor day in corn and soybeans. The fact that the report was expected to be bullish could also have played a role, as traders may have already positioned themselves before today. US 21/22 carryout for wheat came in at 580 mb – not much different from the pre-report estimate of 581 mb, but down from the September number of 615 mb, and the lowest in 14 years. Harvested acres were also reduced to 37.2 million and yield was lowered to 44.3 bpa. World ending stocks for 20/21 were at 288.4 mmt vs the estimate of 291.5 mmt and 292.6 mmt in September. For 21/22 the USDA reported world ending stocks at 277.2 mmt vs a forecast of 280.9 mmt and 283.2 mmt in September. The USDA left the wheat export estimate unchanged at 875 mb. Exports inspections for last week were pegged at 16 mb about equal to the pace needed to meet the USDA’s goal.

CATTLE HIGHLIGHTS: Cattle futures finished lower on weak price action on Tuesday.  Dec cattle lead the market lower, losing .925 to 129.050, and Oct cattle dropped 0.600 to 125.025.  Feeder cattle finished mixed with Oct .750 lower to 158.575.

For the fourth day in a row, Live cattle prices failed to push through overhead resistance, and faded during the session on Tuesday.  The Live cattle market is still a bear spread market, which keeps the selling pressure on the deferred contract, as market looks to remove the premium from the deferred contracts.  The weak price action on Tuesday will open the door technically for some additional downside pressure.   Cash trade has stayed quiet, as bids are still quiet, but asking prices are $125-126.  Most likely, trade will hold of until the end of the week.   Midday retail values were lower, with Choice losing 0.27 to 280.85,  and Select fell 2.19 to 261.45. The load count was light/moderate at 107 loads. Daily slaughter was estimated at 120,000 head, 2,000 under last week, as cattle supplies still seem ample to keep the cash market in check.  Feeder cattle saw mostly higher trade, with the exception of October cattle (expires 10/28) which lost 0.750 to 158.575. Nov feeders gained 0.075 to 161.800. The premium of the futures to the cash index weighed on the front end of the market. The Feeder Cash Index traded at 154.15, up .53, and a $4.425 discount to the front-month Oct futures. Strong selling in the grain markets helped support the feeder market overall on Tuesday.  Failure to push through resistance may have triggered selling pressure.  The soft price action will lead to some additional selling pressure unless the cash market moves higher to support the market.

LEAN HOG HIGHLIGHTS: Hog futures finished strongly lower with triple digit losses, as well as technical selling and soft cash tone. Oct hogs expired on 10/14 were 0.875 lower to 89.075, and Dec hogs were 2.000 lower to 78.175.

Sellers pushed the hog market lower, as Dec hogs failed to hold the $80 support level.  Hog traders may be eyeing the gap on the charts established from the bullish response to the Hogs and Pigs report.  The top of that gap is  at 77.200 on the Dec futures.  In addition, talk of the possibility of moving the processing lines back to a faster pace as Negotiations between the USDA and plant workers group is developing.  This could push extra supplies into the market place in the month ahead, if an agreement is reached.  Cash market still holds a softer tone.  Direct trade was unreported yesterday due to the Columbus day holiday, and the lack of new keeps pressure in the market.  The Lean Hog Index traded 0.35 lower to 91.60. Holding a premium to Oct and Dec hogs should help support the front of the market, but the overall selling pressure was too strong on Tuesday. Pork carcasses at midday traded lower, giving up the gains from Monday to start the week.  Carcasses lost 1.41 to 106.60, trading $6.00 off yesterday’s midday value.  The load count was moderate at 253 loads, as buyer may look at the value in the pork product at these levels. The afternoon closes for cash and retail values will likely give the direction for the futures open tomorrow. Cash prices are still historically strong, and a firmer tone in the cash market could push prices higher, but that is still lacking at this time. Technically, the hog market uptrend is still intact, but prices are filling gaps and firming up the charts.  Keys support levels slipped today, and the hog market will need to find its footing at the bottom of the trading range.

Top Farmer Midday Update 10-12-21

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CORN

  • Dec down 4 @ 5.29
  • Waiting to see if China buys corn to add to their reserves or bring down their domestic prices
  • USDA might lower corn export estimate due to the slow start caused by Hurricane Ida
  • Pre report yield estimate at 175.9 bpa (vs 176.3 bpa in September)
  • Pre report carryout estimate at 1.421 bb (vs 1.408 bb in September)

SOYBEANS

  • Nov down 13 @ 12.15
  • China’s Dalian exchange showed losses in meal and oil, but gains in soybeans
  • China still has crushing plants taking downtime due to coal shortages
  • Rumors overnight China may have bought US and Brazilian soybeans
  • Pre report yield estimate at 51.1 bpa (vs 50.6 bpa in September)
  • Pre report carryout estimate at 289 mb (vs 185 mb in September)

WHEAT

  • Dec wheat down 4 @ 7.28, Dec KC unchanged @ 7.35, Dec MNPLS up 1 @ 9.47
  • Supporting wheat is the rise of Russian wheat prices and tight supplies of European milling wheat
  • Paris milling futures trading close to last week’s contract high
  • Australian August wheat exports were at a 9 year high of 2.1 mmt
  • Pre report carryout estimate at 581 mb (vs 615 mb in September)

CATTLE

  • Oct LC down 0.300 @ 125.325 & Oct FC down 0.725 @ 158.600
  • Cattle futures holding near gains from last week despite concern around demand and boxed beef weakness
  • Market may have already factored in higher cash
  • Choice cuts down 2.15 and select up 0.90
  • Cattle slaughter projected at 121K

HOGS

  • Oct hogs down 0.825 @ 89.125 & Oct pork cutout unchanged @ 108.525
  • There is a large gap on the charts below current levels (though with current weakness it is starting to be filled)
  • Talk out of China about their hog futures rallying – their sow inventory might be down
  • National Direct Afternoon report declined 0.64
  • Hog slaughter projected at 478K
  • CME Lean Hog Index for 10/12: down 0.35 @ 91.60

TFM Sunrise Update Oct 12, 2021

Grain - A hand scooping soybeans

CORN

Corn futures were quiet again overnight within Monday's narrow trading ranges.  Dec corn, at 5.32 continues to churn sideways along 10 and 20-day Moving Averages ahead of today's October Supply and Demand report set to be released at 11:00 AM Central.  The U.S. is expected to get a lot of rain over the next few days, which should delay harvest.  USDA Weekly Harvest Progress numbers will be released this afternoon, delayed one day due to the Columbus Day holiday.  Harvest is expected to be around 46% complete in this week’s report versus the 32% average.  Meanwhile, Brazil’s forecast is showing good rains over the coming weeks.  The funds remain net long more than 160,000 corn contracts. Today's October USDA report will likely play a big part in determining the corn direction over the coming weeks.  We expect volatility to follow the release of the numbers as South American weather drives prices.  Most expect the agency to lower U.S. 2021/22 corn carryout, and hope for an uptick in exports.  The U.S. crop is looking to come in around 15 bil bu, ethanol usage near 5.3 bil and residual use near 5.7 bil, while exports average guess is around 2.6 bil. leaving Ending Stocks around 1.3 bil bu vs USDA 1.408 bil.

SOYBEANS

The soy complex was down slightly overnight with Nov beans off 3 cents to 12.25-1/4 while continuing to cave in to a fresh 6-1/2 month low that was etched at 12.23-1/2.  Meal futures also barely took out Monday's low overnight.  USDA was closed for holiday on Monday, so harvest progress numbers will be out later today with 48% completion expected versus the 39% average.  We look for an uptick in 2021/22 carryout numbers by USDA today. and a U.S. crop near 4.40 bil bu, Crush near 2.20 bil, exports 2.02 and Ending Stocks near 300 mil versus USDA's 185 mil.  Prices will need to see an increase in Chinese buying and lower 2022 South American crops for prices to go higher.  Chinese Jan bean were up 24 yuan overnight; Soymeal down 38; Soyoil down 70; Palm oil down 86; Corn up 14 -- Malasyian palm oil prices overnight were down 104 ringgit (-2.10%) at 4851 as exports of the commodity weakened in October, according to a Kuala Lumpur-based trader.

WHEAT

Wheat futures are firm this morning, underpinned by new highs in oats this week.  Russian wheat values were seen adding some underlying support to the wheat market as prices rise for 12 straight weeks.  In addition, U.S. wheat production is at a 19 year low.  Dec Chicago and KC contracts are up 1 to 2 cents to 7.34 and 7.35-3/4, respectively after running into technical resistance in the 7.50 to 7.75 price area.  Prices continued to slump yesterday and again overnight ahead of today's USDA reports.  Dec MPLS wheat is up 3 to 9.48-1/2 this morning.  USDA, today should drop World wheat total supply with world wheat milling supplies near a record low.  The average trade guess for 2021/22 wheat carryout is near 576 mil bu vs 615 mil in September.  U.S final exports may drop, offsetting an expected reduction in the U.S. 2021 wheat crop and ending stocks.

CATTLE

Cattle futures calls are mixed.  Prices consolidated on Monday for the second trading day, holding near the top of last week’s trading range in an overall quiet session.  Live cattle are challenging resistance at the overhead moving averages which could limit the upside and the recovery off the lows.  Typical Monday trade in the cash market as bids and asking prices are undefined.  The majority of trading volume will likely hold off until late in the week.  Trade is expected to stay mostly steady again with last week’s levels.  Closing retail values were mixed, with Choice losing 2.15 to 281.12, but Select lifted .90 to 263.64 The load count was light at 107 loads.  Cattle supplies in the near term still seem ample, and there still doesn’t seem to be any urgency for packers to bid up for cattle.  Last week total beef production slaughter was up 3.1%, reflecting a larger supply picture.   Feeder cattle mostly higher trade, with the exception of October cattle.  The premium of the futures to the cash index weighed on the front end of the market.  The Feeder Cash Index traded at 153.62, down .95, and a $5.705 discount to the front-month Oct futures.

HOGS

Hogs are called steady to weaker.  After consolidating, sellers returned to the hog market to start the week.  December hogs fell to test support at the $80 level, which held.  Pork carcasses at midday traded higher, which lift prices off the lows for the day.  Carcasses closed higher holding a portion of those gains, gaining 1.02 to 108.35.  The load count was moderate at 318 loads.  Negotiated hog prices are $0.69 lower at $68.37 per cwt on 3,806 head, keeping pressure on the market.  The Lean Hog Index traded 0.64 lower to 91.95.  Holding a premium to Oct and Dec hogs should help support the front of the market.  Pork production was up 3.7% from last week, and slaughter was 3.2% higher.  The stronger production numbers weighed on prices to start the week.  Technically, the hog market uptrend is still intact, but was due for some correction.  Support levels held again yesterday, but may need stronger overall fundamental numbers to initiate new buying.

Top Farmer Closing Commentary 10-11-21

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CORN HIGHLIGHTS: Corn futures edged higher with small gains, ending today’s session 1-1/2 to 3 cents higher. Harvest delays due to expectations for heavy rains the next few days across the Midwest, continued concern regarding availability of skyrocketing fertilizer costs, and higher energy all were supportive factors today.

Tomorrow the market will have more news to digest in the form of a USDA WASDE report due for release at 11:00 central. December futures closed 2-1/2 cents higher at 5.33. Yield, feed, and exports will be under the scope tomorrow and likely will see some changes. Projected carryout is expected at 1.421 bb as compared to September’s 1.408 bb. The average per-report yield estimate is 175.9 bu/acre and compares to the September figure of 1.408. Feed could be reduced slightly due to a downward revision of near 3 million hogs on the most recent Hogs and Pigs report. Exports could be the wild card. Last month’s figure was 2.475 bb. Higher shipping costs and some arrows pointing toward lower imports from China, not to mention time lost for shipping due to Hurricane Ida, might suggest lower exports.

 

SOYBEAN HIGHLIGHTS: Soybean futures ended with double digit losses as both meal and oil went on the defensive today. November lost 14-3/4 cents to close at 12.28-1/4, the lowest close for November contract since March 30. Good yield results and expectations that tomorrow’s ending stocks will be confirmed higher weighed on futures. The average pre-report estimate for ending stocks is 289 mb with a range of 192 to 373 mb. Last month’s figure was 185 mb.

Despite strong world vegetable oil prices, a rapid start to the planting pace in Brazil and a lack of fresh positive news is weighing on futures. The technical picture looks weak, and with harvest pressure in full swing, it is our bias that farmers may have been light on sales for new crop anticipating higher prices. This is likely bringing more beans into the pipeline. The big picture is the bigger concern as Brazil will likely have another record production year assuming normal conditions. Demand for meal will likely be reduced from last month due to a near 3 million less hogs on the most recent Hogs and Pigs report. Higher energy prices are viewed as supportive, yet the more near-term picture is of rising supply numbers.

WHEAT HIGHLIGHTS: Without much news to drive wheat, most traders already positioned themselves ahead of the WASDE report, leading to a mixed to lower close today; the market will be looking for direction tomorrow. Dec Chicago wheat lost 2-1/4 cents, closing at 7.31-3/4 and March lost 1-3/4 to end the session at 7.45-1/2. Dec KC wheat lost 3 cents, closing at 7.34-1/2 and March was down 3 at 7.42-3/4.

Due to the Columbus Day holiday, some data is delayed for release until tomorrow, including crop progress and grain inspections. More impactful will be tomorrow’s USDA Supply and Demand report, which is anticipated to be friendly, as pre-report estimates for US wheat carryout are at 581 mb vs 615 mb last month. That number would be the lowest in 14 years if the expectations are correct. World wheat carryout is also projected to be reduced to a five year low of 280.9 mmt (vs 283.2 mmt). Specifically looking at spring wheat, it is predicted the USDA will report a decline in production due to abandoned acres. Weather wise there will be a fair amount of rain across the US over the next few days, and temperatures are expected to cool down as well. Russian wheat prices have been higher for 12 consecutive weeks. Winter wheat conditions are favorable in Europe and Argentina remains dry. The high level of the US dollar does remain a point of concern for wheat prices, as they usually share an inverse relationship.

 

CATTLE HIGHLIGHTS: Quiet day again in the cattle markets, as prices consolidated at the top of last week’s trading range. Oct cattle gained 0.050 to 125.625, and Dec cattle were 0.075 lower to 130.175.

Cattle prices consolidated on Monday for the second trading day, holding near the top of last week’s trading range in an overall quiet session. Live cattle prices are challenging resistance at the overhead moving averages and could limit the upside and the recovery off the lows. It was typical Monday trade in the cash market as bids and asking prices are undefined. Most of the trading volume will likely hold off until late in the week. Trade is expected to stay mostly steady again with last week’s levels. Carcasses had another difficult week last week, as choice carcasses dropped $9.68 and select was down $4.88 on the week. Select values did find some stability in the end of last week, and that may have helped boost prices. Today, midday retail values were mixed, with choice losing 0.15 to 283.12, but select lifted 1.69 to 264.43. The load count was light at 48 loads. Tightening in the choice/select spread trading at 18.69 at midday may be reflecting some stability in the select beef, and still keeping some demand in the market for higher quality choice beef. Cattle supplies in the near term still seem ample, and there still doesn’t seem to be any urgency for packers to bid up for cattle. Last week total beef production slaughter was up 3.1%, reflecting a larger supply picture. Feeder cattle saw mostly higher trade, with the exception of October cattle (expires 10/28) which lost 0.150 to 159.23. Nov feeders gained 0.575 to 161.725. The premium of the futures to the cash index weighed on the front end of the market. The Feeder Cash Index traded at 153.62, down 0.95, and a $5.705 discount to the front-month Oct futures. The cattle market has posted an impressive quick recovery but could be running into some overhead resistance. The downtrend is still intact, and the overall fundamentals may limit further upside. The price action early this week will be key to set the tone in the market for the week.

LEAN HOG HIGHLIGHTS: Hog futures finished lower, as softer cash tone to end the week, carried over into the Monday market. Oct hogs expired on 10/14 were 0.300 lower to 89.950, and Dec hogs were 1.325 lower to 80.175.

After consolidating, the sellers returned to the hog market to start the week. December hogs fell to test support at the $80 level, which held today. Cash market was softer on the Friday close, as direct trade was softer by $.98 on carcass-based prices to $69.26, and live pricing saw no comparison but settled at $54.71. Pork carcasses at midday traded higher, which lifted prices off the lows for the day. Carcasses gained 5.44 to 112.43. The load count was moderate at 146 loads. The afternoon closes for cash and retail values will likely give the direction for the futures open tomorrow. The Lean Hog Index traded 0.64 lower to 91.95. Holding a premium to Oct and Dec hogs should help support the front of the market. Pork production was up 3.7% from last week, and slaughter was 3.2% higher. The stronger production numbers weighed on prices to start the week. The overall trend should start showing tighter hog numbers, as the Hogs and Pigs report detailed. Cash prices are still historically strong, but a firmer tone in the cash market could push prices higher. Technically, the hog market uptrend is still intact, the market was due for some correction. Support levels were held again today but may need stronger overall fundamental numbers to initiate new buying.

Top Farmer Midday Update 10-11-21

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CORN

  • Dec up 2 @ 5.33
  • US expected to get a lot of rain in the coming days, delaying harvest
  • Brazil forecast shows good rains over the coming weeks
  • Harvest is expected to be around 50% complete this week
  • China’s corn harvest expected to be record large at 273 mmt
  • Funds remain net long 163,000 contracts
  • USDA Oct supply and demand report released tomorrow

SOYBEANS

  • Nov down 6 @ 12.37
  • Rumors that China bought 5-7 cargoes of US soybeans after returning from holiday
  • Palm oil down slightly after last week’s contract high
  • Crude oil is over $80 per barrel in the Nov contract – may affect soybean oil
  • Harvest is expected to be around 50% complete this week
  • USDA Oct supply and demand report released tomorrow
  • Most analysts expect an increase to carryout on tomorrow’s report

WHEAT

  • Dec wheat down 2 @ 7.32, Dec KC down 2 @ 7.36, Dec MNPLS down 3 @ 9.43
  • Russian wheat values have been higher for 12 weeks straight
  • US wheat production is the lowest in 19 years
  • USDA Oct supply and demand report released tomorrow
  • Expectation for a decline in spring wheat production on tomorrow’s report due to abandoned acres
  • Winter wheat conditions are favorable in Europe

CATTLE

  • Oct LC up 0.050 @ 125.625 & Oct FC down 0.075 @ 159.400
  • Fund’s long liquidation may have run its course
  • Fundamentals are bearish on supply and may limit the upside
  • Cash trade was steady to $1 higher last week
  • Choice cuts down 2.03 and select down 1.70
  • Cattle slaughter projected at 119K
  • CME Feeder Cattle Index for 10/8: up 0.77 @ 154.57

HOGS

  • Oct hogs down 0.450 @ 89.80 & Oct pork cutout down 0.850 @ 108.925
  • There is a large gap on the charts below current levels
  • Weakness of cash and cutouts were not supportive to the market
  • Availability of hogs means packers are not very aggressive
  • National Direct Afternoon report declined 0.92
  • Hog slaughter projected at 475K
  • CME Lean Hog Index for 10/11: down 0.64 @ 91.95

TFM Sunrise Update Oct 11, 2021

Grain - A hand scooping soybeans

CORN

Corn futures mostly steady overnight with Dec trading 5.29 to 5.32-1/4, supported by another new high in crude oil.  The dollar is consolidating near recent highs, too, which is a weighing factor on commodity prices.  Higher energy prices and tight corn supplies keep a bid under the market heading into tomorrow's October Supply/Demand report.  Brazil’s corn production in the 2020-21 season, which began in March, is now seen at 85 mil tons, the USDA’s Foreign Agricultural Service said in a report on its website.  That’s below the USDA’s official estimate of 86 mil tons.  U.S. harvest progress, slow export demand, and South American planting limits rally potential.  Weekly Export Inspections will be out this morning followed by Harvest Progress this afternoon.  Meanwhile, market talk includes the fact that the fertilizer market has been hit hard this year due to extreme weather, plant shutdowns, sanctions and rising energy costs in Europe and China, pushing prices past levels that traders and farmers hadn’t seen since the global financial crisis.

SOYBEANS

The soy complex was also narrowly mixed overnight.  November beans are up 2 cents to 12.45, mid-range of last night's 15-1/2 cent trading range from 12.35-3/4 and 12.51-1/4.  This is about mid-range of last week's 31-1/2 cent range.  Bean meal is up 70 cents, and Bean oil is up .12.  Dec meal futures lost about $8 last week in a fourth consecutive week of losses and seventh out of the last eight.  That market has been down almost 5-1/2 consecutive months while shedding more than $100.  In a statement sent to Reuters on Friday, Brazil's Paranagua port authority said exporters shipped 419,314 tons of soymeal last month, a 35% rise from August and almost 33% up from the same month a year ago.  Tomorrow's USDA report will shed light on the potential trend for price direction moving into the end of the year.  Chinese Jan bean futures, last night were up 40 yuan ; Soymeal down 17; Soyoil up 72; Palm oil up 150; Corn up 34.  Malaysian palm oil prices overnight were down 13 ringgit (-0.26%) at 4953.

WHEAT

Winter wheat futures were firm overnight with Dec Chicago and KC contracts up 4 cents to 7.38 and 7.41-1/2, respectively after running into technical resistance in the 7.50 to 7.75 price area.  MPLS wheat is narrowly mixed this morning with nearby Dec fractionally higher to 9.47.  Both KC and MPLS contracts have provided the boost to the complex despite slack exports.  Tomorrow's USDA report is expected to show a reduction in world wheat supplies, though.  Around the globe, isolated showers are forecast in the Pacific Northwest, but not enough, delaying winter wheat establishment.  Cold temperatures this week are not favorable.  Scattered showers in the Central and Southern Plains will ease heat stress and favor planting and establishment.  Favorable conditions for winter wheat planting and establishment is seen for most of Europe.  Mostly favorable conditions for  Ukrainian winter wheat planting and establishment, but more moisture is needed for Russia.  Favorable conditions for reproductive to filling winter wheat in Australia.  Recent showers benefit reproductive to filling winter wheat in southern Brazil.  More rain is needed for reproductive to filling winter wheat in Argentina.  Favorable conditions for planting winter wheat are noted in China.

CATTLE

Cattle futures calls are mixed having posted an impressive quick recovery, but could be running into some overhead resistance.  China has banned imports of U.K. beef from cattle under 30 months of age due to mad cow epidemic reported in the nation recently, according to a statement on the customs WeChat account today.  The downtrend is still intact, and the overall fundamentals may limit further upside.  The price action early this week will be key to set the tone in the market.  Cattle prices consolidated on Friday, holding near the top of last week’s trading range in an overall quiet session.  Cash trade was quiet on with the exception of some clean up trade around $124 in the South, steady to $1 higher in some areas.  Northern dressed trade was marked at $196, steady with the previous week.  Estimated slaughter last week, not counting Saturday kill, was 599,000 head, 19,000 more than the previous week.  Cattle supplies in the near-term still seem ample, and there still doesn’t seem to be any urgency for packers to bid up for cattle.  The Choice cutout ended the week $9.68 softer, and Select decreased $4.88/cwt.  With the large decline that has occurred over the last several weeks, buyer interest is expected to increase as they look to restock for the end of the year.  Feeder cattle saw some profit taking as well, losing from .075 to .875.   Oct futures expire on Thursday.

HOGS

Hogs are called mixed.  Technically, the uptrend is still intact.  Support levels held again Friday, but may need stronger overall fundamental numbers to initiate new buying.  Friday’s closing direct trade was lower by .92 to $69.26 on carcass-based prices, and live pricing was $54.71, and had no comparison due to “confidentiality” on Thursday.  The Lean Hog Index traded 0.92 lower to 92.59 and should limit upside in futures today.  However, cash is holding a premium to Oct and Dec hogs which should help support the front of the market.  October hogs expire on 10/14.  Pork carcasses at the close on Friday traded softer.  Carcasses lost 5.27 to 106.99.  The load count was moderate at 280 loads.  Estimated hog slaughter for the week, not including Saturday kill is estimated at 2.373 million head, 20,000 more than last week, but 65,000 head under last year.  The overall trend should start showing tighter hog numbers, as the Hogs and Pigs report detailed.

Top Farmer Closing Commentary 10-08-2021

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CORN HIGHLIGHTS: Corn futures closed lower losing 2 to 3-1/2 cents lower on a lack of positive news and big supply increases expected for South America. Dec futures lost 3-1/2 cents for the day and 11 cents for the week closing at 5.30-1/2. Harvest pressure is mounting as producers will soon be pushing near 50% complete. This week, we would argue feedback from producers suggests many are experiencing yield better than anticipated from just prior to starting harvest.

Conab, a reporting agency under the Ministry of Agriculture in Brazil, is estimating Brazilian corn production at 116 mmt as compared to the September estimate of 87 mmt. More soybean acres double-cropped to corn is where the big acre push will come from. Yet, much attention will focus on availability of inputs, namely fertilizer and herbicides. Potential support may come from China where recent heavy rainfall totals in northern provinces are delaying the start of harvest as well as increasing quality concerns. Add to that a severe energy crisis which could impact drying the crop in a timely manner. China is expecting a record crop, yet it’s not in the bin yet. Tuesday, the USDA will release the next WASDE report. Export inspections normally released on Monday will be delayed one day due to the government closure for Columbus Day.

SOYBEAN HIGHLIGHTS: Soybean futures firmed throughout the session, yet finished lower with Nov dropping 4-1/4 cents closing at 12.43, well off the daily high of 12.62-1/2. Near the noon hour, it looked like futures just ran out of gas led by weaker soybean oil, wheat, and corn futures. For the week, Nov soybeans lost 3-1/2 cents.

Conab, a reporting agency under the Ministry of Agriculture in Brazil, is estimating the Brazilian soybean crop at 140.75 mt versus the September estimate of 137.33. This would be record-large. This past year’s crop is estimated at 135.9 mmt. Paramount in the weeks and months ahead, is if there is enough fertilizer and other inputs for the Southern Hemisphere to produce much-needed large crops. We are hearing more concerns regarding supply logistics. U.S. prices, while closing on a disappointing note today, managed to hold together well this week, a key window for harvest. Rain delays were noted, and it looks like it will be hit or miss for harvest the next several days due to rain. Nonetheless, a bullish key reversal on charts established Tuesday held, bolstering the bullish argument that a low price may be at hand. We are not quite sold that a low is in, therefore will stay defensive. Strong world vegetable prices were also noted this week and with energy prices firming (crude oil hitting $80 today) the big picture perspective is supportive. Rapeseed and canola prices continue to reach new highs. Lastly, if fertilizer supply is limited, a switch to more bean acres in the U.S. is likely. We’ll keep a stop under Nov 2022 futures as a strategy to move more defensive if the market indicates us to do so.

WHEAT HIGHLIGHTS: Along with corn and soybeans, wheat had a lower close on a lack of volume ahead of next week’s WASDE report. Traders, near the noon hour, seemed to take a defensive posture in all three commodities. The dollar held strong this week holding near its high for the year. Dec Chicago wheat lost 7-1/4 cents, closing at 7.34 and Mar lost 7-1/2 to end the session at 7.47-1/4. Dec KC wheat lost 3-3/4 cents, closing at 7.37-1/2 and Mar down 3-3/4 closing at 7.45-3/4.

Chi and KC wheat futures again could not hold their gains into the end of the trading session. Paris milling wheat futures made new contract highs but also struggled to keep those gains. Despite lower prices to end the week, there has not been much bearish news. MPLS spring wheat, still trying to buy acres, did eke out a positive close in the front-month contracts. Argentina’s wheat crop is reported to be 37% headed but their good to excellent rating dropped to 44% from 51% last week. In Saskatchewan, Canada, wheat yields are estimated at 30 bushels per acre vs 36 on average. Ukraine’s wheat crop is estimated at 32.3 mmt. Russia’s wheat export tax continues to rise and is near $60 per metric ton. Looking at the big picture, and despite a lower close to end the week, the outlook for wheat is still bullish. With a WASDE report released Tuesday, it will be interesting to see if U.S. wheat ending stocks are estimated below 590 mb – if so it would be the lowest in 14 years. From a weather standpoint, rains are expected west of the Mississippi which could interrupt winter wheat seedings, though the moisture is welcomed.

CATTLE HIGHLIGHTS: Quiet day in the cattle markets, as prices saw some profit-taking and price consolidation after a positive week of gains. Oct cattle gained 0.300 to 125.575, and Dec cattle were 0.150 higher to 130.250. For the week, Oct live cattle gained 5.175, and Jul was 5.050 higher. Nov feeder cattle gained 8.250 on the week.

Cattle prices consolidated on Friday, holding near the top of this week’s trading range in an overall quiet session. Live cattle prices are challenging resistance at the overhead moving averages and could limit the upside and the recovery off the lows. Next week’s early price action will be key to the price direction to start next week. Cash trade was quiet on with the exception of some clean-up trade. The bulk of the work was done for the week. Most deals tagged at $124 in the South, steady to $1 higher in some areas. Northern dress trade was marked at $196, full steady with last week. Midday retail values were mixed, with choice losing 1.25 to 284.05, but select lifted 0.90 to 265.34. The load count was light at 62 loads. Carcasses values still trended softer this week, but the pace of the descent has slowed. Tightening in the choice/select spread trading at 18.71 at midday may be reflecting some stability in the select beef, and still keeping some demand in the market for higher quality choice beef. Estimated slaughter this week, not counting Saturday kill, was 599,000 head, 19,000 more than last week. Cattle supplies in the near term still seem ample, and there still doesn’t seem to be any urgency for packers to bid up for cattle. Feeder cattle saw some profit-taking as well, losing from 0.075 to 0.875. Nov feeders slipped 0.450 to 161.150. The premium of the futures to the cash index weighed on the front end of the market. The Feeder Cash Index traded at 154.57 a $4.900 discount to the front-month Oct futures, which expires on 10/14. The cattle market has posted an impressive quick recovery, but could be running into some overhead resistance. The downtrend is still intact, and the overall fundamentals may limit further upside. The price action early next week will be key to set the tone in the market for the week.

LEAN HOG HIGHLIGHTS: Hogs futures finished mixed with choppy trade on Friday as a firmer cash tone provided some overall support. Oct hogs expired on 10/14 were 0.400 higher to 90.250, and Dec hogs were 0.525 lower to 81.500. For the week, Oct hogs lost 2.050 and Dec was 3.675 lower.

Hog prices consolidated on Friday with a narrow trading range. The hog market failed to hold early session gains as cash prices found some stability on the afternoon close. Thursday’s closing direct trade was firmer by $0.17 on carcass-based prices to $70.18, and live pricing was not reported due to “confidentiality”. Pork carcasses at midday traded softer, which limited the upside movement for the day. Carcasses lost 2.35 to 109.91. The load count was moderate at 183 loads. The afternoon closes for cash and retail values will likely give the direction for the futures open next week. The Lean Hog Index traded 0.92 lower to 92.59. Holding a premium to Oct and Dec hogs should help support the front of the market. Estimated hog slaughter for the week, not including Saturday kill, is estimated at 2.373 million head, 20,000 more than last week, but 65,000 head under last year. The overall trend should start showing tighter hog numbers, as the Hogs and Pigs report detailed. Cash prices are still historically strong, but a more firm tone in the cash market could push prices higher. Technically, the hog market uptrend is still intact, the market was due for some correction. Support levels were held again today but may need stronger overall fundamental numbers to initiate new buying.

Top Farmer Midday Update 10-08-2021

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CORN

  • Dec up 2 @ 5.36
  • Weather forecasts are predicting rain next week in the western Corn Belt, which could slow harvest there
  • USDA holiday on Monday – crop progress/inspection numbers delayed to Tuesday – markets will remain open Monday
  • Matif corn futures higher due to slow harvest (France only 7% harvested vs 47% last year)
  • Argentina corn 21% planted vs 25% average
  • China’s corn harvest has started – but heavy rains and flooding are raising quality concerns

SOYBEANS

  • Nov up 9 @ 12.56
  • Rumors yesterday that China is back in the US soybean market – may be looking for up to 8 cargoes from the PNW
  • Soybeans are getting support from world veg oil markets – Malaysian palm oil at new highs and Canada canola prices at new highs
  • CONAB estimates Brazil’s soybean crop at 140.8 mmt (record large vs 137 mmt last year)
  • Dalian futures have reopened as China returns from holiday

WHEAT

  • Dec wheat down 5 @ 7.36, Dec KC down 1 @ 7.40, Dec MNPLS up 4 @ 9.46
  • Argentina wheat is 37% headed – their good to excellent rating dropped to 44% (from 51% last week)
  • Saskatchewan, Canada wheat yields are at 30 bushels per acre vs 36 average
  • Pennant formations are developing on the Chi and KC wheat charts
  • Paris milling wheat futures again made new contract highs
  • Ukraine’s wheat crop estimated at 32.3 mmt
  • Russia’s wheat export tax is near $60 per metric ton and continues to rise

CATTLE

  • Oct LC up 0.100 @ 125.375 & Oct FC up 0.025 @ 160.375
  • October feeder cattle yesterday closed at the highest level since September 7
  • Live and feeder cattle futures were able to breach levels of technical resistance
  • Boxed beef may be near a bottom, but uncertainty remains
  • Choice cuts down 1.09 and select down 4.87
  • Cattle slaughter projected at 116K
  • CME Feeder Cattle Index for 10/7: up 0.92 @ 153.80

HOGS

  • Oct hogs up 0.475 @ 90.325 & Oct pork cutout down 0.150 @ 110.150
  • There is a large gap on the charts below current levels
  • Export sales to China were disappointing – their production is increasing
  • Packers yesterday paid a little more for hogs but are still able to obtain the required number of hogs without much trouble
  • National Direct Afternoon report increased 0.17
  • Hog slaughter projected at 476K
  • CME Lean Hog Index for 10/8: down 0.92 @ 92.59

TFM Sunrise Update Oct 8, 2021

Grain - A hand scooping soybeans

CORN

Corn futures were up 3 to 4 cents overnight while maintaining sideways movement on the charts.  For the week, Dec corn, at 3.37 is down about 4 cents.  A tight supply scenario and rallying energy prices keep corn supported through the harvest time-frame, but prices remain stuck in neutral until more market-moving news becomes available.  Direction will be choppy heading into next Tuesday's USDA October Supply/Demand report as traders wait to see if the agency will make adjustments.  Basis bids for corn shipped by barge to the U.S. Gulf Coast were steady to slightly weaker on Thursday on rising supplies, although declines were limited by solid export demand

SOYBEANS

The soy complex was higher overnight led by a new high seven-week high in soyoil.  Nov beans are up a dime this morning to 12.57-1/4, marking a 13 cent gain for the week.  Overnight, China re-opened after holiday.  Jan bean futures traded up 248 yuan ; Soymeal down 119; Soyoil up 442; Palm oil up 570; Corn down 8;  Malaysian palm oil prices overnight were up 123 ringgit (+2.54%) at 4972 heading for its third straight weekly advance, the longest winning streak since July, spurred by tight supplies of global vegetable oils and stronger petroleum prices.  Spot basis bids for soybeans firmed at U.S. Midwest river elevators and some processing sites on Thursday as rains slowed the harvest in a few areas.

WHEAT

Wheat futures were firm overnight.  Dec Chicago futures are up 3-3/4 cents to 7.45 and but have lost a dime this week in a defined five-day down-trend.  Dec KC wheat is up 4-3/4 cents to 7.46, and off 13 cents for the week.  Dec MPLS future are up a penny this morning to 9.43-1/4 and up 20 cents for the week including yesterday's new contract high at 9.49.  Wheat prices have continued to outperform corn and soybeans to the topside, as front month Chicago wheat is trading within about 40 cents of it’s highest price traded since 2013.  Support for Chicago is likely coming from the Minneapolis spring wheat, and also from Russian wheat prices as they’ve moved higher for 12 straight weeks  Spot basis bids for hard red winter (HRW) wheat were unchanged on Thursday in the southern U.S. Plains and cash trade was quiet as producers concentrated on planting the 2022 wheat crop and harvesting corn, soybeans and sorghum.

CATTLE

Cattle futures calls are mixed for today after Feeder cattle led the cattle markets to their highest prices in nearly a month.  Follow through buying and short covering this week has been more tied to technical buying versus fundamentals.  Cash trade was quiet on Thursday, with the bulk of the work done for the week.  Most deals happened at $124 in the South, steady to $1 higher in some areas. Northern dress trade was marked at $196, steady with last week.  Retail values were mixed at the close, with choice losing 1.32 to 285.30, but Select lifted 1.53 to 264.44.  The load count was light/moderate at 185 loads.   Like live cattle, Feeder gains may need to be cautious with the feeder cash index trading at 153.80, a $6.500 discount to the front-month Oct futures, which expire on 10/14.  The cattle market has posted an impressive quick recovery, but could be running into some overhead resistance.  The down trend is still intact, and the overall fundamentals may limit further upside.

HOGS

Hogs are called mixed.  Technically, the hog market uptrend is still intact, but was due for some correction.  Support levels at the 100-day MA held again yesterday, but may need stronger overall fundamental numbers to initiate new buying.  Triple digit gains in the cattle complex and spill over outside-market strength helped push the hog market slightly higher.  Thursday’s closing direct trade was .17 higher on carcass-based prices to $70.18, and live pricing was not reported due to "confidentiality".  The steady tone could help support futures this morning.  The Lean Hog Index traded 0.60 lower to 93.51. Maintaining a premium to October and December hogs should help support the front of the market.  Weekly export sales failed to move the market, with new sales last week at 22,100MT, down 48% from last week’s strong number.  Mexico was the primary buyer of U.S. pork, and China was absent from the report.  Pork carcasses at midday traded higher, but lost those gains into the close, losing .60 to 112.26.  The load count was moderate at 366 loads.

Top Farmer Closing Commentary 10-07-2021

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CORN HIGHLIGHTS: Corn futures firmed late in the session and finished 2 cents higher in Sep as it led today’s late-session comeback. After trading more than five cents lower, corn futures followed soybeans and oats (limit higher) into the close. Export sales at 49.8 mb were termed supportive as well.

Year-to-date sales are 1.046 bb, ahead of last year’s 1.018 bb. Total projected sales are estimated at 2.475 bb. As you can see, the year is off to a good start, however, sales have slowed significantly since mid-summer. Today’s number was supportive and welcomed. As indicated before, the market has moved into a window of time where end users are buying hand to mouth due to high prices and expectations for more inventory availability at likely lower prices during the harvest season. Yet, the markets have been very dynamic over the last year with sharply higher energy, wheat, and oat prices all providing underlying support, as well as competition for corn acres. Fertilizer is now the hot topic as high prices and concerns about supply may mean fewer acres for corn. From a big picture perspective, if fertilizer prices stay high, corn prices will likely need to rally, maybe substantially in order to secure enough acres. Attention will also be focused and Southern Hemisphere crops and how fast soybeans are planted and how many acres. More acres of soybeans could mean more double acres for corn yet input costs may be a problem as well.

SOYBEAN HIGHLIGHTS: Soybean futures firmed late, finishing near the high for the session gaining 5 to 6 cents. Sold export sales at 38.3 mb, along with firmer equity markets, and sharp gains in soybean oil were factors providing support.

Once again, it was the soybean oil market leading today’s rally. This was impressive since the rally came after moderate to strong losses in palm oil. A sharply higher finish in the oat market along with corn prices rebounding may have helped the overall tone for the commodity complex and reason for traders to buy beans. Yet, it may be a little soon to be overly optimistic that the market is about ready to take off. Soybean oil will likely remain the star of the bean complex as the industry grapples with growing energy concerns and the need for biodiesel. Planned expansions or growth to the crushing industry is signaling the longer-term expectation for increased demand. Soybean meal, on the other hand, continues to trade near or at year-low prices. The good news is lower protein prices should keep livestock demand firm and potentially the reason for poultry, hog, and dairy industries to grow.

WHEAT HIGHLIGHTS: Wheat futures had a mixed close, with MPLS being the only class to post gains finishing near 3 cents higher. New contract highs were posted as spring wheat is trying to buy acres. Sep Minneapolis reached a new contract high of 8.24-3/4. Dec Chicago wheat lost 4-3/4 cents, closing at 7.41-1/4 and Mar lost 4-1/4, to end the session at 7.54-3/4. Dec KC wheat lost 3-3/4 cents, closing at 7.41-1/4 and Mar down 3-1/4 closing at 7.49-1/2.

Winter wheat could not hold its gains into the close today. However, the outlier was spring wheat, which made new contract highs. In the EU, Paris milling wheat futures also continue to make new highs. Today, the USDA reported an increase of 12.2 mb of wheat export sales for 21/22. It is expected that in October the USDA will estimate a record low stocks to usage ratio for world wheat exporters. As the world’s largest wheat exporter, Russian news is always relevant, and some analysts believe their wheat seedings could see a reduction of 1-2 million acres due to dryness. Additionally, uncertainty surrounding the outlook on Russian long-term wheat exports remains, with their inflation in September reported at 7.4% (a level not seen since 2016). Egypt bought 240,000 mt of wheat from Russia and Romania in their tender and paid about 5-8 dollars per ton higher than their previous purchases. Some slightly bearish news is that India is expected to export the largest amount of wheat they have in 8 years, around 4.2-4.4 mmt. That does not change the overall global picture of tight stocks and lower production, however.

CATTLE HIGHLIGHTS: Feeder cattle led the cattle markets higher as technical buying and short-covering left the cattle markets to their highest prices in nearly a month. Oct cattle gained 1.450 to 125.275, and Dec cattle were 1.875 higher to 130.1875.

Follow-through buying and short-covering pushed cattle futures higher, as the price move higher this week has been more tied to technical buying versus fundamentals. Cash trade was quiet on Thursday, with the bulk of the work done for the week. Most deals tagged at $124 in the South, steady to $1 higher in some areas. Northern dress trade was marked at $196, full steady with last week. Midday retail values were mixed, with choice losing 0.30 to 286.32, but select lifted 2.54 to 265.45. The load count was light/moderate at 92 loads. With daily slaughter at 120,000 today, which was 1,000 below last week, there still doesn’t seem to be any urgency for packers to bid up for cattle. Feeder cattle were sharply higher, gaining from 1.500 to 3.550. Nov feeders gained 3.475 to 161.600. Follow-through buying and short-covering supported the feeder market. Like live cattle, gains may need to be cautious with the Feeder Cash Index trading at 153.80, a $6.500 discount to the front-month Oct futures, which expire on 10/14. The cattle market has posted an impressive quick recovery, but could be running into some overhead resistance. The downtrend is still intact, and the overall fundamentals may limit further upside.

LEAN HOG HIGHLIGHTS: Livestock strength and outside markets help lift hog futures higher on Thursday. Dec hogs were 0.300 higher to 82.025. Oct hogs expired on 10/14 were 0.225 higher to 89.850  

Triple-digit gains in the cattle complex and spill-over strength help push the hog market slightly higher. In addition, technically, Dec hogs held the 100-day moving average, leaving some upside room on the chart. Gains were limited by closing direct cash prices on Wednesday. Wednesday’s closing direct trade was down $1.25 on carcass-based prices to $70.01, and live pricing fell $2.30 to $54.65, limiting gains on Thursday. Pork carcasses at midday traded higher, gaining 3.19 to 116.05. The load count was moderate at 179 loads. The afternoon close will likely give the direction for the futures open tomorrow, as prices have been trying to find some footing. Weekly export sales failed to move the market, with new sales last week at 22,100MT, down 48% from last week’s strong number. Mexico was the primary buyer of U.S. pork, and China was absent from the report. The Lean Hog Index traded 0.60 lower to 93.51. Holding a premium to Oct and Dec hogs should help support the front of the market. Technically, the hog market uptrend is still intact, the market was due for some correction. Support levels were held again today but may need stronger overall fundamental numbers to initiate new buying.

Top Farmer Midday Update 10-07-2021

Grain - A combine harvesting corn

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CORN

  • Dec down 1 @ 5.31
  • Weather forecasts are predicting rain next week in the western Corn Belt, which could slow harvest there
  • The eastern Corn Belt is receiving rains today
  • Ethanol production from last week increased 64,000 barrels per day to 978,000 barrels per day
  • China comes back from their Golden Week holiday tomorrow – there are rumors they have been asking for US grain and ethanol prices
  • USDA reported an increase of 49.8 mb of corn export sales

SOYBEANS

  • Nov down 1 @ 12.41
  • Board crush margins for soybeans are the highest since October 2020
  • If soybeans close lower this week, it would be the lowest weekly close since late March
  • Palm oil was lower overnight
  • Concerns over inflation still abound, in part due to rising veg oil prices – the UN stated that global food prices are the highest in a decade
  • USDA reported an increase of 38.3 mb of soybean export sales

WHEAT

  • Dec wheat down 4 @ 7.42, Dec KC down 3 @ 7.42, Dec MNPLS up 4 @ 9.43
  • India is expected to export between 4.2 and 4.4 mmt of wheat (the highest in eight years)
  • Egypt bought 240,000 mt of Romanian and Russian wheat in their tender – they paid 5-8 dollars per ton higher than their previous prices
  • Russian wheat seedings could see a reduction of 1-2 million acres due to dryness
  • USDA reported an increase of 12.2 mb of wheat export sales

CATTLE

  • Oct LC up 0.875 @ 124.700 & Oct FC up 1.700 @ 158.500
  • Boxed beef weakness remains a concern
  • Cash cattle have traded steady to $1 higher this week
  • Choice cuts down 1.09 and select down 4.87
  • CME Feeder Cattle Index for 10/6: up 0.09 @ 152.88

HOGS

  • Oct hogs up 0.125 @ 89.750 & Oct pork cutout up 1.325 @ 110.200
  • There is a large gap on the charts below current levels
  • Tight hog supplies may have already been factored into futures price
  • Packers are able to obtain hog numbers to fill demand without much trouble
  • National Direct Afternoon report declined 1.25
  • CME Lean Hog Index for 10/7: down 0.60 @ 93.51

TFM Sunrise Update Oct 7, 2021

Grain - A hand scooping soybeans

CORN

Corn futures were mixed overnight with Dec up 2-1/4 cents to 5.34-1/2 while hovering around the contract's 50-day moving average the past two weeks.  Talk of increased harvest pressure and thoughts of a less-than-friendly Oct Supply/Demand report next Tuesday is helping subdue buying interest.  Dec 2022 futures, which pushed to a new contract high of 5.38-3/4 on Monday are fractionally lower this morning to 5.27-3/4.  The dollar is weaker and crude is showing signs of slowing its ascent by trading 1.17 lower this morning.  Trade estimates for this morning's USDA Weekly Corn Export Sales are 350,000 to 800,000 tons.  The agency's Foreign Agricultural Service’s forecast for China corn imports in 2021-22 marketing year is 6 million metric tons below WASDE forecast in September.  Estimates for corn imports in 2020-21 is raised to 30 million tons.  Grain traders reported that spot basis bids for corn and soybeans were steady to stronger at river elevators in the U.S. Midwest on Wednesday as costs for barge freight continued to fall.

SOYBEANS

The soy complex was narrowly mixed overnight.  Nearby Nov beans are trading 2-1/2 cents higher this morning 12.44-1/2.  Next year's new crop Nov contract is up a penny 12.46.  Futures traded an inside session yesterday and again overnight, consolidating in new, lower ranges following the fallout from last week's Quarterly Grain Stocks report.  Technically, the new trading ranges secure the contract's 200-day moving average an area of resistance on the November 2021 bean chart moving forward into harvest.  Frist support lies at 12.34.  Trade estimates for this morning's USDA Weekly Export Sales are 600,000 to 1.20 mil tons.  Malaysian palm oil prices overnight were down 23 ringgit (-0.47%) at 4849 after rallying to a record high as exports tumbled from second-largest grower Malaysia and weaker crude oil prices damped its appeal for biodiesel use.  China’s markets are closed for holiday and will open tomorrow.  In South America, Brazil’s new crop seen 8.2 mil tons larger than the 2020-21 crop, according a Bloomberg survey of seven analysts.  Planted area is seen 1.8 mil hectars higher at 40.3 mil.  Conab, the Brazilian national supply company, is scheduled to release its first estimates for the 2021-22 crop the morning of Oct. 7.

WHEAT

Wheat futures were mostly unchanged overnight.  U.S. Chicago wheat futures are up 4 cents to a round number of 7.50.  This puts the contract in a technically bought situation after rallying to through the September trading trading range on Oct 1.  Dec KC wheat is up 3-1/2 cents this morning to 7.48-1/2; And, Dec MPLS spring wheat is up 7 cents to 9.46.  European milling wheat futures etched a new contract high this week.  Trade estimates for this morning's USDA Weekly Export Sales are 200,000 to 500,000.  Egypt, this week bought their 240,000 tons of wheat from Russia and Ukraine, putting its total purchases for the 2021-22 season about 27% below a similar time last year.  A government agency in Pakistan has issued an international tender to purchase and import 90,000 tons of wheat, keeping up a trend of strong import demand after more than 1.1 million tons bought in past weeks.

CATTLE

Cattle futures calls are mixed.  Mild gains were made on Wednesday as cash traded started to develop with most deals tagged at $124 in the south, steady to $1 higher in some areas.  Northern dressed trade was marked at $196, full steady with last week.  Retail values were softer on the close, with Choice losing 1.09 to 286.62, and Select 4.87 to 2662.91.  The load count was light/moderate at 157 loads.  The Choice/Select spread stays wide at 23.71, showing decent demand for the Choice beef product.  Cattle numbers may be tightening, but packers are still passive in their bids for cash cattle. With daily slaughter 5,000 head over last week, there still doesn’t seem to be any urgency for packers to bid up for cattle.  Feeder cattle gained from .700 to 1.600 on follow-through buying and short-covering.  We are cautious with the feeder cash index trading at 152.88, a $4.00 discount to the front-month Oct futures, which expire on 10/14.  The cattle market may be trying to etch out a bottom, but the fundamentals will still be the key in signaling that the bottom may be in.  Outside markets were negative on Wednesday, and if that pattern continues, the market will likely be open to further downside.

HOGS

Hogs are called mixed.  Technically, the market has turned into an uptrend, but with such a strong rally after the Hogs and Pigs reports, the market was due for some correction.  Support levels held on Wednesday, but may need strong retail and export numbers to initiate new buying.   Soft closes for both National Direct cash trade and carcass values on Tuesday helped bring selling pressure into the hog market on Wednesday.  Direct cash trade was lower, losing 1.25 on carcass based prices to $70.01, and live pricing fell 2.30 to $54.65.  This will limit gains today.  On Wednesday, midday pork carcass values surged higher at midday, gaining 8.76, and held a potion of those gains into the close, finishing 4.73 higher to 112.86. The load count was light at 288 loads.  The trade will be watching export sales numbers.  Last week was strong at 42,000 mt.  The Lean Hog Index traded 0.06 higher to 94.11.  A premium to October and December hogs should help support the front of the market.

Top Farmer Closing Commentary 10-06-2021

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CORN HIGHLIGHTS: Corn futures reversed from gains early in the session as harvest pressure and a downward revision of expected exports to China by the USDA attaché coupled with weaker energy pressured prices. December lost 5-1/4 cents to close at 5.32-1/4 and December 22 dropped 3-1/4 ending the session at 5.28. The US ag attaché raised China’s 20/21 corn imports to 30 mmt (vs the USDA estimate of 26 mmt) The US ag attaché lowered China’s 21/22 corn imports to 20 mmt (vs the USDA estimate of 26 mmt).

As harvest picks up steam, we’re getting more consistent results from farmers who are getting better than expected yields than those who are disappointed. It appears that farming practices have made a big difference in certain areas of the country. For instance, if fungicide was applied, yield loss due to tar spot may have been averted. We are hearing of some rather significant yield reductions where disease is the issue. The energy markets posted a bearish key reversal by the noon hour, and this seemed to take some of the wind out of the bullish argument for corn. Prices came out of the pause session at 8:30 gaining 7 cents but soon came under pressure in sympathy with weaker soybeans and a higher dollar. Fertilizer availability and price is a consideration we will likely make note of frequently. On the one hand, it is only October and spring is a long way off, yet where there is smoke there is fire, and availability of copious supply by spring is currently being questioned.

SOYBEAN HIGHLIGHTS: Soybean futures faltered today on a higher dollar, harvest pressure, and a lack of follow-through buying. Most contracts lost 8 cents giving back half of yesterday’s gains with November leading today’s drop closing at 12.42, down 8.5 cents.

Today was a disappointment for traders who are friendly soybeans. A favorable-looking reversal yesterday in which the daily trading range was larger than Monday’s and a positive close near the daily high failed to initiate follow-through buying today. Soybean oil was up strongly yesterday, but it looked as though traders were willing to sell oil and buy meal today suggesting yesterday’s higher oil markets were short-lived. Soybean oil, however, will likely remain well supported as limited supply and a continued move toward a more biodiesel-friendly environment over the next several years suggest longer-term buying interest on price dips. Soybean meal is priced where it was a year ago this month. We anticipate end-user buying to more aggressively step in front of the meal market based on a value proposition. It’ll be many weeks before South American supplies are considered available to the marketplace. We also expect farmer selling of soybeans to drop off sharply after harvest. Lastly, we still question the Quarterly Stock’s report and 256 million bushels on hand at the end of the marketing year. Nonetheless, we made an additional cash sale today as the overall trend remains weaker since prices peaked in early June.

WHEAT HIGHLIGHTS: Wheat futures settled with small gains in the face of a higher dollar – indicative of tight supplies. Dec Chicago wheat gained 1-1/4 cents, closing at 7.46 and March 1-3/4 to close at 7.59. Dec KC wheat gained 4 cents, closing at 7.45 and March up 4, closing at 7.52-3/4.

Yesterday there were no big headlines to move wheat, likely indicating the previous session’s selloff was technical and short lived. Today’s gains, though relatively small, indicated a reversal from yesterday’s downward move. MPLS wheat had a better day than Chicago or Kansas contracts, posting double-digit gains in front-month contracts. In fact, the Dec ’21 contract settled at 9.39 – a new high, and a level not seen on the Dec chart since November 2012. Today’s forecast shows rains in the southeast Midwest, delaying SRW planting. In global news, Russia is still talking about export restrictions starting in February to fight food inflation. Additionally, the Russian Ag Minister stated that their wheat exports will be 37.5 mmt vs a trade guess of 31.5 mmt. Moving to the Southern Hemisphere, Australia is experiencing dryness in some of their wheat growing regions, which could negatively impact yield, and there is word that Argentina may implement a ban on wheat (and corn) exports. Egypt is tendering for wheat, though it will likely come from the Baltic or Russian region as U.S. prices are still not competitive.

CATTLE HIGHLIGHTS: Cattle futures saw mild gains on Wednesday as cash trade started to develop. Oct cattle gained 1.000 to 123.825, and Dec cattle were 0.375 higher to 128.225.

Overall, trade on Wednesday was choppy, but front-month futures pulled in line with the start of cash trade for the week. Light to moderate trade developed today with most deals tagged at $124 in the South, steady to $1 higher in some areas. Northern dress trade was marked at $196, full steady with last week. The bulk of trade will likely develop more into the end of the week. Midday retail values were softer, with choice losing 0.13 to 287.85, and select dropped 1.52 to 266.26. The load count was moderate at 93 loads. With total beef slaughter down 4.1 from last year, cattle numbers may be tightening, but packers are still passive in their bids for cash cattle. With daily slaughter at 121,000 today, which was 5,000 head over last week, there still doesn’t seem to be any urgency for packers to bid up for cattle. Feeder cattle were higher, gaining from 0.700 to 1.600. Nov feeders gained 1.250 to 158.125. Follow-through buying and short-covering supported the feeder market. Like live cattle, gains may need to be cautious with the feeder cash index trading at 152.88, a $4.000 discount to the front-month Oct futures, which expire on 10/14. The cattle market may be trying to etch out a bottom, but the fundamentals will still be the key in signaling that the bottom may be in. Outside markets were negative on Wednesday, and if that pattern continues, the market will likely be open to further downside.

LEAN HOG HIGHLIGHTS: Hog futures traded lower as soft close in the cash market and the retail values on Tuesday added some selling pressure to the hog market. December hogs were 0.825 lower to 81.725.   

Soft closes for both National Direct cash trade and carcass values on Tuesday helped bring selling pressure into the hog market on Tuesday. In addition, weak outside markets added some “risk off” mentality as the hog market fell back to test support levels. Tuesday’s closing direct trade was down 0.75 on carcass-based prices, and live pricing fell 0.31, limiting gains on Wednesday. Pork carcasses closed over $4.00 lower yesterday afternoon, after a strong midday trade.  On Wednesday, midday pork carcass values surged higher, gaining 8.76 to 116.89, helping bring hog prices off the morning lows. The load count was moderate at 168 loads. The afternoon close will likely give the direction for the futures open tomorrow. Thursday also brings the next round of export sales numbers. Last week was strong at 42,000 mt, and the market will be watching the actions of China on the report. The Lean Hog Index traded 0.06 higher to 94.11. Holding a premium to October and December hogs should help support the front of the market. Technically, the hog market has turned into an uptrend, but with such a strong rally after the Hogs and Pigs reports, the market was due for some correction, since the market is in the middle. Support levels were held today but may need strong retail and export numbers to initiate new buying.

Top Farmer Midday Update 10-06-2021

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CORN

  • Dec down 4 @ 5.33
  • CONAB reported that as of October 2nd, 24% of Brazil’s corn crop was planted (up 21% from a year ago)
  • Private estimates of US national corn yield are higher than what the USDA reported in September
  • Starting this weekend, rains are expected in the western Corn Belt
  • The US ag attaché raised China’s 20/21 corn imports to 30 mmt (vs the USDA estimate of 26 mmt)
  • The US ag attaché lowered China’s 21/22 corn imports to 20 mmt (vs the USDA estimate of 26 mmt)

SOYBEANS

  • Nov down 7 @ 12.44
  • CONAB estimated the Brazil soybean crop at 135.9 mmt (and 2022 at 143 mmt)
  • Malaysian palm oil remains at record high prices
  • China is trying to ship palm oil vessels to plants – soybean processing plants remain closed there
  • China will return from their Golden Week holiday on Friday
  • Brazil October soybean exports are at 2.6 mmt (23% higher than a year ago)

WHEAT

  • Dec wheat up 2 @ 7.47, Dec KC up 5 @ 7.46, Dec MNPLS up 9 @ 9.34
  • Australia is experiencing dryness in some wheat areas – this could negatively impact yield
  • Wheat will require higher input costs (as will corn)
  • The Russian Ag Minister stated that their wheat exports will be 37.5 mmt vs a trade guess of 31.5 mmt
  • Russia is still talking about export restrictions starting in February to combat food inflation
  • It is possible that Argentina will implement a ban on wheat exports

CATTLE

  • Oct LC up 0.900 @ 123.725 & Oct FC up 0.625 @ 156.725
  • Cash cattle have not yet traded this week
  • Due to high feed costs and drought, cattle liquidation continues
  • Packers don’t currently have reason to be more aggressive
  • Choice cuts down 1.47 and select up 2.62
  • Cattle slaughter projected at 122K
  • CME Feeder Cattle Index for 10/5: up 0.26 @ 152.79

HOGS

  • Oct hogs down 1.050 @ 89.925 & Oct pork cutout down 1.375 @ 109.025
  • There is a large gap on the charts below current levels
  • Cash and cutouts have not supported the rally of hog futures
  • This year supply may not be as high as usual, but the supply of hogs for slaughter usually increases this time of year
  • National Direct Afternoon report declined 0.75
  • Hog slaughter projected at 478K
  • CME Lean Hog Index for 10/6: up 0.06 @ 94.11