TFM Sunrise Update for November 21, 2019


Corn futures are expected to remain narrowly choppy. Prices were steady overnight amid a weak technical picture that has been attracting sellers to the corn market. Better rains next week for Brazil are a negative factor. Meanwhile, a higher placement number for October in Friday's USDA Cattle on Feed report could translate to higher feed usage demand. At these price levels, global demand may start to pick up, but we need better signs of those sales occurring. Trade estimates for this morning's USDA Weekly Export Sales are 400,000 to 900,000. This data is highly anticipated to see if we have any trends changing and exporters moving to U.S. shores.


Bean futures were flat/weak overnight with a pullback in soy oil seen weighing on beans. In addition, newswires report that a Phase 1 deal between the U.S. and China could be pushed into next year which would favor the market bears at this juncture in time. Despite an improved demand picture overall, favorable South American weather, as well as a weakened technical picture with Wednesday's close, opens the doors for additional long liquidation. Demand will remain a key player in order to keep prices from falling further. Trade estimates for this morning's USDA Weekly Export Sales are 800,000 to 1.40 mil tons for beans; 100,000 to 450,000 for soy meal; and, 5 to 25,000 for soy oil.


Wheat futures are called mixed. While Chi and KC wheat charts are looking friendlier, and demand is off to a good start for this crop year, that pace will need to continue in the face of competitive global supplies. Wheat futures are likely to stay choppy to firm as long as demand stays overall supportive and the market may be concerned regarding dry weather in the southern Plains. Supply issues in Argentina and Australia also continue to be a source of support and have been a reason for the market to remain upbeat. Trade estimates for this morning's USDA Weekly Export Sales are 200,000 to 500,000 tons.


Cattle futures are called steady to firmer. Early signs of cash trade trending slightly higher this week, supported by favorable retail values may allow cattle prices to inch upward going into Friday's cattle on feed numbers. Likely, the market will stay in a choppy and sideways fashion until those numbers are published. Cattle placements on feedlots in October are expected to come in 11.4% above a year ago.


Hog futures are called mixed to lower. Despite a snapback in retail values in Wednesday's midday trade, the weak close in Wednesday afternoon's trade opens the door for additional long liquidation, as well as speculative selling. Hog prices may start becoming a value that could attract some buying interest. Export sales will be closely watched for any ramp up given the large supply of U.S. pork.

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