TFM Midday Update 05-31-2022

CORN

Jul corn down 21 @ 7.56
Russia continues to insist that there will be some kind of corridor to allow for Ukraine exports of grain and sun oil, news that has pushed the grain complex lower today
Last week there was similar talk, but Putin said the corridor would only happen if sanctions were lifted against Russia
Weather should be mostly dry for more planting opportunities the next few days, followed by some rain forecast over the weekend
This afternoon’s Crop Progress report is something to watch, with corn possibly 90% planted after the Northern Plains had better weather last week

Jul soybeans down 32 @ 17.00
The soy complex is sharply lower today despite a big jump in crude which has generally been supportive of soybean oil
The increase in planting pace is also a likely factor in grain markets across the board, as good weather last week allowed for a lot of work to get done
Friday’s soybean Crush report showed the value of crush remains high at 20.40, but the crush premium has narrowed to 2.57 a bushel, down from 2.90 last week
The CFTC report on Friday showed that funds have been sellers, which is also contributing to lower prices

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Jul wheat down 60 @ 10.97, Jul KC down 56 @ 11.80, & Jul MNPLS down 46 @ 12.59
Wheat is trading lower, following Russia’s statements about a deal to allow shipments of grain to leave Ukraine
If Russia ends up increasing attacks or not allowing these shipments, prices should correct to the upside
There have been reports of Russia shipping grain that they have stolen from Ukrainian farmers, but with the fighting continuing there will be a limited amount to continue stealing

Jun LC down 0.225 @ 131.900 & Aug FC up 1.025 @ 167.325
Live cattle are lower, while feeders are green this morning with traders anticipating steady to lower cash
Orders from retail will give an indication of product movement and level of demand following the holiday weekend and kick-off to grilling season
Cattle weights are falling which forces the packer to be more aggressive in purchasing
Choice cuts up 1.45 and select up 2.07
Cattle slaughter projected at 124K
CME Feeder Cattle Index for 5/27: up 0.92 @ 154.72

Jul hogs down 3.900 @ 107.850 & Jun pork cutout down 2.500 @ 112.000
Hogs are down hard this morning after gapping lower on the open, and cash falling
Futures have been at such a premium to cash that without more support from higher cash the futures are correcting
The packer may be aggressive in purchases this week needing to replenish after the holiday weekend
National Direct Afternoon report has cash down 1.67
Hog slaughter projected at 475K
CME Lean Hog Index for 5/31: up 0.53 @ 104.93

Amanda Brill