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TFM Sunrise Update - January 14, 2020

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Corn futures were unchanged overnight after trying to grind higher since Friday's January crop report. USDA announced that more data will be needed, requiring a resurvey of upper Midwest farmers' harvest results that could lead to downward revisions. The improved technical picture, including stronger closes the last two sessions should help the corn market carve out a new 2-1/2 month high today for the Dec 2020 corn contract which is now back above $4.00. The market will need new news to keep headed in the right direction. USDA, on Monday announced South Korea bought 137,000 tons of Option-Origin corn in a run-up to this week's signing of the Phase One deal with China.


Soybean futures were flat/weak overnight as consolidation continues with South American weather remaining conducive to crop production. The market is finding support on expectations and hope that signing by China and the U.S. tomorrow will lead to more aggressive export activity. Meanwhile, bean oil prices remained on the defensive overnight, putting pressure on beans and further showing signs of a top in that market.


Wheat futures were up 3 cents overnight. Prices traded weaker throughout the session yesterday and finished with small losses after last week's Supply and Demand report confirmed what we have ample inventory. This month's surge in the dollar is providing formidable headwinds for the wheat market as it makes U.S. supplies less attractive price-wise on the world market.


Cattle futures are expected to open steady to weaker following yesterday's poor finish, especially in front month Feb. The narrowing of the choice/select spread would suggest feedlots have ample inventory. Feb is trading at a premium to the cash market, so traders are awaiting cash to move higher in order to justify current futures levels.


Hog futures are called mixed to lower with higher than expected short-term supply weighing on the market. Front month futures slumped to their lowest levels in more than a month on Monday with Feb holding a significant premium to the cash index, which is near 59.36. Feb futures closed yesterday at 65.90, down 1.35. The premium was over 10.00 and is beginning to narrow.

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