TFM Midday Update 01-27-2023

CORN

Mar corn up 2 @ 6.84
Corn is trading either side of unchanged today as Argentina’s recent weather has improved their crop conditions
The Buenos Aries Grain exchange reported that following the recent rains, 12% of their corn crop is now rated good to excellent, a big jump from last week’s 5%, with 37% at pollination
Central and northern Brazil are still receiving consistent showers, which is slowing their planting pace for 2^nd crop corn as well as the soybean harvest
Yesterday’s export sales were better than expected and have offered support to prices

Mar soybeans down 3 @ 15.21
Soybeans are trading moderately lower, but have moved higher from their early day lows, which saw prices as much as 7 cents lower
Brazilian soybeans are much cheaper than in the US which leaves the possibility that China could cancel some shipments in favor of Brazil
Soybeans benefitted from Argentina’s rains along with corn, and the Buenos Aries Grain exchange bumped up their good to excellent rating from 3% to 7%
US diesel supplies are at their lowest levels in 9 years and will need help from biodiesel, which should improve bean oil demand in the long run

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Mar Chi wheat down 2 @ 7.51, Mar KC up 7 @ 8.71, & Mar MNPLS down 1 @ 9.18
Wheat is mixed with Chicago and Minn lower, but KC higher as weather calls for dryness in the southwestern Plains, but moisture through eastern Texas and southeastern Oklahoma
The US and Germany are sending tanks to Ukraine, increasing tensions and prompting Russia to strike Ukraine with missiles overnight
Overall, wheat looks like in may have carved out a bottom, and prices may start to reflect the tight global supplies
Nebraska and Oklahoma remain in severe drought and is a concern for HRW wheat, and this weekend single digit temperatures are expected, which could pose a winter kill threat

Feb LC down 0.050 @ 156.675 & Mar FC up 0.300 @ 183.150
Both live and feeder cattle are trading higher with feeders taking the lead with some weakness in the corn market
Cattle traded in the North yesterday at 248, which was steady with last week, while trade has not yet established in the South, but asking prices are around 157 or higher
Packers need to continue their brisk slaughter pace, and that will mean paying up for cattle
Choice cuts up 0.47 and select down 0.32
Cattle slaughter projected at 122K
CME Feeder Cattle Index for 1/26: up 1.03 @ 178.80

Feb hogs down 0.425 @ 76.600 & Feb pork cutout down 0.375 @ 84.000
Hog futures are mixed with nearby months lower but deferred contracts trading higher after cash moved higher yesterday for the first time this year
Cutouts moved higher by 1.35 as of yesterday’s afternoon report which may be signaling a bottoming on the cutouts
Despite overall weakness in cash, hogs are technically oversold, and traders may begin short covering
National Direct Afternoon report fell 1.70
Hog slaughter projected at 487K
CME Lean Hog Index for 1/27: up 0.20 @ 72.52

Amanda Brill