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TFM Sunrise Update Sept 29, 2020

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Corn futures were down 2 to 3 cents overnight, again adhering to 20-day moving averages and consolidating ahead of Wednesday's Quarterly Stocks report. Corn stocks on September 1 are expected to reach 2.25 billion bushels compared with 2.22 billion last year. While this number is higher than a year ago, strong demand from China and a possible lower U.S. yield are factors providing underlying support. Dec corn is at 3.64-1/2, mid-range of Monday's 9-1/4 cent trading range.The last weekly crop ratings report for the year released yesterday afternoon showed the corn crop at 61% good-to-excellent, unchanged from the previous week. The corn harvest lagged slightly as producers focused on soybeans; the U.S. corn crop was 15% harvested, the USDA said, behind the five-year average of 16%.


Soybean futures eased to the bottom of Monday's trading ranges overnight as an early start to harvest weighs on sentiment. Conditions in the western Corn Belt are conducive throughout the first week of October, and with decent cash prices, better than expected yields and little to no carry in the market, farmers are likely to sell right off the combine, putting hedge pressure on an overbought soybean market. Condition ratings for soybeans improved, with 64% of the crop rated in good-to-excellent condition, up 1 point from a week earlier. The U.S. soybean harvest was 20% complete as of Sunday, the USDA said in the weekly crop progress report on Monday, ahead of the five-year average of 15%. Meanwhile, funds remain heavily long the complex, but future buying is likely to be light without fresh bullish news. Nov was down as much as 5-1/4 cents to take out Monday's session low and make a new two-week low of 9.91. The contract's 20-day moving average is at 9.95. On the downside, the market is now targeting support at 9.89-1/2.


The wheat complex was unchanged and the dollar softer overnight. Wednesday's USDA quarterly Grain Stocks report is expected to wheat stocks on September 1 at 2.24 billion bushels as compared with 2.34 billion last year. Production should come in around 1.84 billion bushels as compared with the August estimate of 1.83 billion. In the meantime, traders keep an eye on dryness in Eastern Europe and Russia, as well as net drying in the U.S. Plains affecting HRW wheat germination. Planting of the 2021 U.S. winter wheat crop was 35% complete by Sunday, ahead of the five-year average of 33%, according to USDA. Tender Activity showed that Jordan bought 120,000 tons of optional-origin wheat.


Cattle calls are for steady to higher after recovering on Monday from a gap lower start. Softer boxed beef and uncertainty over what to make of Friday's Cattle on Feed report showing that the large placements numbers of August are becoming more moderate in the last two weeks of September. Cash is undeveloped, but expected to remain as strong as last week, if not up slightly.


Lean hog futures are called steady to firmer on ideas that front month hog supplies are tighter than what the USDA reports. Social media expressed the following comments: "Many view the USDA inventory stats as suspect, with sharply higher cash markets, reduced weights & moderating kill rates all indicating much more current hog inventories than the USDA stats would imply." Strong cash fundamentals will support nearby futures as the cash index continues to rally, mid-day carcass values rise.

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