TFM Midday Update 04-19-2023

CORN

May corn up 1 @ 6.78
Headlines that the UK had higher than expected inflation (and may have to continue to increase interest rates) is putting some financial markets on the defensive.
Many parts of the US are cold and wet, which will delay some of the corn plantings.
Poland has reportedly agreed to allow Ukrainian grain shipments to pass through their country.
Bulgaria is the latest country said to be banning Ukraine grain imports.

May soybeans UNCH @ 15.19
Brazil’s soybean basis continues to trend lower – their crop is big and there is not enough storage for it, leading to farmer selling.
Indonesia palm oil stocks came out 15% lower than last year, and this may be supporting the vegetable oil markets.
There is talk that Argentina may have to import a record 11 mmt of soybeans.
Brazil’s soybean harvest is said to be 86% complete (with about 4.9 billion bu collected).

May Chi wheat down 10 @ 6.88, May KC down 10 @ 8.71, & May MNPLS down 9 @ 8.77
Spring wheat planting in the northern plains and Canada is sure to be delayed with increased snow melt and flooding issues.
There is still uncertainty with the Ukraine export corridor and yesterday there were no vessels inspected in Turkish waters.
Some weather models have rains in the forecast for parts of Kansas, but the European model is drier.
There is talk that Russia’s wheat crop may be down to 86 mmt (compared to 92 mmt last year)

Jun LC down 1.200 @ 164.000 & May FC down 1.200 @ 210.300
Yesterday cattle futures were able to overcome selling pressure to finish with a higher close.
Cattle on Feed report will be released on Friday.
Cash cattle are expected to trade higher this week.
Slaughter pace remains strong, so packers will have to remain aggressive.
Choice cuts up 1.08 and select up 2.29.
Cattle slaughter projected at 127K
CME Feeder Cattle Index for 4/18: up 0.73 @ 206.37

May hogs up 0.425 @ 79.250 & May pork cutout up 0.025 @ 85.000
There is some anticipation that pork consumption will increase as the summer grilling season picks up.
Some demand may shift from beef to pork due to price.
Cutouts were higher yesterday, which may trigger some short covering today.
Hog futures are oversold technically, and may be due for a correction.
National Direct Afternoon report declined 0.65.
Hog slaughter projected at 479K
CME Lean Hog Index for 4/19: up 0.12 @ 71.64

Brandon Doherty