TFM Midday Update 03-17-2023

CORN

May corn down 2 @ 6.31
Private exporters reported sales of 191,000 mt of corn for delivery to China during the 22/23 marketing year
There is talk of China lowering their reserve requirements 25 basis points to try to stimulate their economy
It is still hot and dry in Argentina but there are chances for rain in the 7-10 day forecast
US corn exports are still down 39% from last year

May soybeans down 20 @ 14.71
There are rumors that on this break in price, US might try to buy crude oil to replace strategic reserves
Argentina lowered their soybean crop estimate to 25 mmt
Brazil soybean basis is falling with increased farmer selling and reduced purchases from China so far
China may try to buy soybeans domestically to add to their reserves
Crude oil is lower again at midday, adding to market pressure

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May Chi wheat up 3 @ 7.02, May KC up 10 @ 8.30, & May MNPLS up 3 @ 8.52
Funds are said to be short 96,000 contracts of Chicago wheat as of the most recent available data
Argentina has exported only about 2 mmt of wheat to date (compared to 9 mmt last year)
Brazil, which normally imports wheat, has actually shipped 2.6 mmt
The Black Sea Grain Initiative deal expires tomorrow and an agreement has not yet been reached

Apr LC down 0.400 @ 161.950 & Apr FC down 0.800 @ 194.350
Live cattle were supported yesterday by futures having a discount to cash, but are trending lower again this morning
Cattle on Feed report will be released this afternoon
Pre-report estimates: On feed at 95.6%, placements at 93.9%, marketings at 95.8%
Cattle numbers may tighten, but demand remains a concern
Choice cuts down 0.32 and select down 0.87
Cattle slaughter projected at 119K
CME Feeder Cattle Index for 3/16: down 0.68 @ 188.71

Apr hogs up 0.400 @ 79.850 & Apr pork cutout down 0.625 @ 85.900
Hogs fell apart yesterday and are lower again this morning – there was not much news to drive this move
Selling pressure appears to be technical in nature, and amplified by stops being triggered
Futures are now oversold and may be in need of a correction if a bottom can be established
National Direct Afternoon report declined 0.37
Hog slaughter projected at 481K
CME Lean Hog Index for 3/17: up 0.02 @ 79.95

Brandon Doherty