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TFM Sunrise Update - February 13, 2020

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Corn futures were down 2-1/2 cents overnight overnight as the market respects about a 10 cent trading range awaiting geopolitical, or weather-related news to jar the market loose. For nearby Mar corn, the range is 3.73 to 3.85. We like the way prices closed yesterday. A lack of farmer selling and renewed optimism that trade could provide underlying support could help opt for the higher end of their respective trading ranges. A firmer dollar is concerning. Trade estimates for this morning's USDA Weekly Export Sales, which have been running high, are 700,000 to 1.20 mil tons.


Soybean futures traded higher overnight, but have since retreated and taken back 3 to 4 cents from Wednesday's gains. Bull spreading is noted as traders buy front months with some pointing to optimism over China's effort to control the coronavirus outbreak. However, the uncertainty surrounding the data collection numbers and released reports, given the protective nature of the Chinese administration, have worried many world health officials and is wrapped up in a lack of confidence in the markets. A lack of farmer selling and expectations that demand could pick up on the export front helped provide underlying support. We are concerned about the U.S. dollar continuing to trend higher, though. Trade estimates for this morning's USDA Weekly Export Sales are 600,000 to 1.0 mil tons.


Wheat futures were down 2 to 3 in Chi last night, 4-1/2 in KC and 2 in Mpls. Prices rebounded yesterday but we still see technical damage done this week along with confirmation of heavy world inventories as noted on Tuesday's Supply and Demand report. This week, Egypt bought Russian and Romanian wheat.Trade estimates for this morning's USDA Weekly Export Sales, which have been running high, are 350,000 to 600,00 tons.


Cattle futures are called steady to firmer. Feb has aligned itself with the cash market but Apr through Jun could be viewed undervalued and yesterday's hook reversal was a good technical signal. Packers took full advantage of a rapidly declining futures market to acquire cattle at $119-120/cwt. Early bids of $120 were pulled back as quickly as cattle owners were able to sell a few cattle.


Hog futures are called mixed. We don't see much of a driver in the hog market today which means it could follow through from yesterday's softer finish. The market has closed lower three days in a row as demand confidence surrounding China's means to import more pork lies on shaky ground. About the only positive for the futures market is how far and fast the prices have fallen. This could lead to some bargain buying as a bottom begins to form on the charts.

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