TFM Midday Update 06-13-2022

CORN

Jul corn down 8 @ 7.66
Heavy selling in the equity markets is driving the grain complex lower this morning as Friday’s CPI data continues to set a bearish tone
The aggregate managed fund position across the grain and oilseed space has fallen to the lowest level since January heading into the growing season
Seasonality is coming into play as traders look for the seasonal high in corn this month
Adverse weather could provide some support as above-normal temperatures are forecast over the next two weeks in the Midwest
Friday’s CFTC data showed funds as sellers of 8,074 contracts, reducing their net long position to 184,445 contracts

Jul soybeans down 39 @ 17.07
Soybeans are taking the brunt of the sell-off this morning after impressive gains last week of 47 cents in Jul
The USDA raised 21/22 soybean exports, cutting the carryout to 205 mb, the smallest since 15/16 with 2-1/2 months left in the marketing year
Lower crude oil is providing no support to soybean oil, while meal is significantly lower as well
Friday’s CFTC report showed funds as sellers of 6,727 contracts, reducing their net long position to 83,586 contracts

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Jul wheat down 4 @ 10.68, Jul KC down 2 @ 11.60, & Jul MNPLS down 6 @ 12.16
Wheat was higher in the overnight but succumbed to selling as the market opened
The all-wheat carryout projection for 22/23 is 627 mb, which would be the smallest since 13/14 if confirmed
The USDA report on Friday had very little for the wheat market with no changes made to demand for 21/22 or 22/23 marketing years
Friday’s CFTC report showed funds as sellers of 2,816 contracts of KC wheat, reducing their net long position to 6,750 contracts, the smallest net long held by funds since July 2021

Jun LC down 2.625 @ 133.600 & Aug FC down 3.550 @ 170.925
Both live and feeder cattle contracts are sharply lower due to outside bearish inflationary influences that are driving down the equity markets as well
Cash trade for last week averaged 136 to 137 in the South, 1 to 2 dollars better than the previous week, while dressed in the North was 3 to 4 dollars higher between 225 and 226
Weekly boxed beef was 3.82 higher for choice and 0.41 cents higher for select, ending at 271.32 and 248.89 respectively
Choice cuts up 0.22 and select down 0.72
Cattle slaughter projected at 125K
CME Feeder Cattle Index for 6/10: up 2.07 @ 161.87

Jul hogs down 1.200 @ 104.275 & Jun pork cutout down UNCH @ 108.450
Hogs are lower along with the rest of the livestock complex, while cash was lower and the cutout mostly unchanged at 7 cents lower
Last week’s hog slaughter was only 446k head, compared to 478k head the previous week
With such low slaughter numbers, the packer will likely be forced to be more aggressive this week which should drive cash and the cutout higher
National Direct Afternoon report has cash down 2.43
Hog slaughter projected at 475K
CME Lean Hog Index for 6/10: down 0.12 @ 107.19

Amanda Brill