TFM Midday Update 06-21-2022

CORN

Jul corn down 21 @ 7.64
Corn is lower this morning after the mostly dry forecast is now showing some relief from the hottest temperatures in the northwestern Corn Belt
With wheat prices challenging support and palm oil dropping 21% the last two weeks, the grain sector is starting to show some technical vulnerability
Friday’s USDA report showed one bushel of 8.12 corn in Iowa could produce 9.67 worth of ethanol and distiller’s grains, a narrower margin, but still supportive for ethanol production
Noncommercial traders continue to hold an extremely large net-long position in corn of nearly 400,000 contracts

Jul soybeans down 12 @ 16.89
Soybeans are being pressured lower by a 21% drop in palm oil over the past two weeks which puts it at their lowest level in over four months
Crude is higher today, but is giving no support to the soy complex, which is lower across the board
Friday’s USDA report showed that one bushel of 17.50 soybeans in Illinois could produce 19.81 worth of meal and oil, a margin of 2.31, which is down from 2.70 the previous week
In China, September soybeans on the Dalian exchange closed 2.4% lower at the equivalent of $21.12 a bushel

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Jul wheat down 30 @ 10.05, Jul KC down 46 @ 10.59, & Jul MNPLS down 38 @ 11.32
Wheat is lower as weather forecasts ease the extreme heat later in the week and show some rain on the Canadian side of the border
Only 56% of the spring wheat crop is emerged last week in North Dakota and in Montana 30% of the crop was rated poor or very poor
Russia’s 2022 wheat crop is now seen at 85.4 million tonnes, up 1.9 million from the prior forecast as spring weather has been favorable
Friday’s CFTC data showed little change is speculative holdings for KC wheat, even as prices have neared important levels of support

Jun LC up 0.050 @ 138.075 & Aug FC up 2.275 @ 175.225
Live cattle are slightly higher this morning, while feeder cattle are higher following a drop in corn
Cash average 4 dollars higher than the previous week in both the North and South last week, and the packer is likely to be aggressive again this week
Slaughter pace has been strong, and supply is tight which leaves the packer with less bargaining power
Choice cuts down 0.90 and select up 1.15
Cattle slaughter projected at 126K
CME Feeder Cattle Index for 6/17: up 1.61 @ 162.17

Jul hogs up 1.000 @ 112.000 & Jul pork cutout up 0.325 @ 115.500
Hogs are higher thanks to more strength in the cutout which was 3.25 higher on Friday which has been supportive to the nearby months
July futures were up over 5 dollars last week as traders became more aggressive to get long the market as demand increases into July 4 weekend
National Direct Afternoon report has cash down 1.62
Hog slaughter projected at 473K
CME Lean Hog Index for 6/21: up 0.41 @ 109.16

Amanda Brill