TFM Midday Update 4-12-2023

CORN

May corn up 3 @ 6.54
Corn is trading slightly higher in the front month but lower in the deferred contracts after yesterday’s WASDE showed no changes to the carryout when trade was looking for a decrease.
While the US ending stocks were left unchanged and the second lowest in nine years, world ending stocks slipped to 295.35 mmt which came in as expected.
Brazilian corn production was left unchanged but due to the severe drought in Argentina, their production was lowered from 40 mmt to just 37 mmt, the lowest in 22 years.
There has been talk that Russia will not agree to extend the Black Sea grain deal which could support prices if true.

May soybeans up 2 @ 14.99
Soybeans are lower with the biggest losses in new crop after the USDA revised their expectations for Brazil’s crop to be larger and left the US carryout unchanged.
Expectations were for the USDA to reduce the US carryout to just 201 mb from 210 mb, but that did not happen, and little was changed apart from South American production.
The drought ravaging Argentina has caused their estimated production to fall to just 27 mmt from 33 mmt, and could be even lower, while Brazil’s estimated production was bumped up to a record 154 mmt from 153 mmt in the previous WASDE.
Argentina’s third round of the soy dollar program is not working as well as it did the previous times as farmers hold onto their beans despite the exchange rate incentive as an inflation hedge.

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May Chi wheat up 7 @ 6.81, May KC up 3 @ 8.72, & May MNPLS up 4 @ 8.66
Wheat is trading higher today despite the WASDE showing an increase in US ending stocks due to poor exports.
Ending stocks were reported to be 30 mb higher with a decline in feed usage accounting for 25 mb and an increase in imports accounting for the other 5 mb.
Both Ukraine and Russian wheat exports were significantly increased with Russia exporting a record large 45 mmt after aggressively selling and undercutting the market.
The southern Plains remain dry and crop conditions fell 1% from last week with HRW wheat at 13-20% good to excellent and soft wheat at 65-70% good to excellent.

Apr LC up 0.750 @ 173.050 & Apr FC up 0.075 @ 202.175
Live cattle continue to make new contract highs as cash trade is on fire, while feeders are following fats up as well.
Asking prices in the South are starting around 174 to 175, while there have been reports of some offers in Nebraska between 182 and 183.
Choice cuts up 2.19 and select up 3.64.
Cattle slaughter projected at 126K.
CME Feeder Cattle Index for 4/11: down 0.32 @ 193.01.

Apr hogs down 0.175 @ 72.875 & Apr pork cutout up 0.075 @ 78.675
Hogs have unfortunately not been sharing in the enthusiasm from the cattle market and continue lower as lower cutouts and mediocre cash trade holds prices down.
The cutouts were up 0.40, and with hogs so technically oversold, funds may eventually come in as buyers.
National Direct Afternoon report fell 0.33.
Hog slaughter projected at 480K.
CME Lean Hog Index for 4/12: down 0.12 @ 72.52.

Amanda Brill