TFM Midday Update 6-2-2022

CORN

Jul corn up 3 @ 7.34
July corn is slightly higher while Dec is up 5 cents, quiet trade to begin the day after yesterday’s harsh sell-off
Russia continues to offer to allow Ukrainian grain exports but only in exchange of an easing of sanctions that would allow Russia to export as well, a deal that Western officials are wary of
Turkey has agreed, in principle, to play a part in clearing mines from the Black Sea but is understandably hesitant to commit
China has tried to avoid buying US corn, but with corn closing on the Dalian exchange at the equivalent of $10.94 a bushel, they may come looking for cheaper US prices

Jul soybeans up 30 @ 17.20
Soybeans are higher following private exporters reporting sales of 352,000 metric tons of soybeans for delivery to Pakistan
Both soybean oil and meal are higher today as well with higher crude and good crush demand
Wednesday’s Fats and Oils report from NASS showed 180.9 mb of soybeans were crushed in April, up 6% from a year ago
China announced that they will sell 500,000 tons of soybeans out of their reserves on June 10

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Jul wheat up 24 @ 10.65, Jul KC up 26 @ 11.54, & Jul MNPLS up 7 @ 12.04
Wheat is higher across the board following the violent fund selling the past two days
It remains unclear if Russia will allow Ukraine to export grain, but there are roughly 22 mmt of old-crop wheat held captive in Ukraine that could be shipped if allowed
Russia has continued their relentless attacks on Ukraine, Russia demands that sanctions be lifted for Ukraine to export, and Turkey seems unwilling to clear the mines in the Black Sea, so it does not appear highly likely that this export deal will happen
The seven-day forecast for the northern US Plains is drier which should allow better planting progress

Jun LC up 0.675 @ 133.475 & Aug FC up 1.725 @ 171.450
Both live and feeder cattle are higher this morning despite higher grain, a bullish sign that the seasonal lows may be in
Cash trade was reported at 135 yesterday, down 2 dollars from last week’s weighted average, and narrowing the gap between futures and cash as June expiration nears
Most of the cash trade will take place today and steady to higher numbers will give futures a boost
Choice cuts down 0.12 and select up 0.26
Cattle slaughter projected at 125K
CME Feeder Cattle Index for 6/1: up 0.14 @ 153.36

Jul hogs up 0.550 @ 112.975 & Jun pork cutout up 0.550 @ 114.450
Hogs are higher this morning following an impressive jump in cash, and further gains in the cutout of 2.13
The packer has seen the high level of demand over the holiday weekend and is being more aggressive with cash purchases
Saturday slaughter is estimated to be 148K head
July futures have outpaced June as traders look for a longer duration of time remaining for the contract
National Direct Afternoon report has cash up 4.10
Hog slaughter projected at 479K
CME Lean Hog Index for 6/2: down 0.24 @ 104.91

Amanda Brill