TFM Midday Update 07-01-2022

The CME and Total Farm Marketing offices will be closed Monday, July 4, 2022, in observance of Independence Day

CORN

Jul corn up 13 @ 7.57
Corn is lower as better weather forecasts keep buyers at bay, and did not get any support from a mostly neutral Stocks and Acreage report yesterday
With equity markets diving and inflation scaring speculators out of the commodity markets, open interest in corn is now the lowest level since January 12, 2017
Yesterday’s Stocks report was a non-event with stocks at 4.346 bb, in line with estimates, and estimated corn acres at 89.921 million acres vs 89.861 expected

Jul soybeans down 40 @ 16.35
Soybeans are sharply lower despite a friendly stocks and acreage report yesterday, showing the fund’s relentless liquidating, even in the face of bullish news
Trade was looking for a record large soy planting number of 90.4 million acres, but the USDA reported just 88.3 million acres, down 2.7 million acres from March intentions
With soy stocks very tight, the report should have produced a bullish move, but lagging export sales and improved weather spurred funds to liquidate
The June 1 soy stocks number of 971 mb was slightly higher than trade estimates, but most of the beans were on farm, up 51% from a year ago

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Jul wheat down 28 @ 8.41, Jul KC down 40 @ 9.08, & Jul MNPLS down 30 @ 9.58
Wheat continues its trajectory lower as better weather conditions spur fund selling across the grain complex
The USDA pegged “other spring” wheat acres at 11.110 million vs 11.200 million in March, which was more than expected given the planting delays across the northern Plains
Total open interest in Chicago wheat is now down to the lowest level since 2005
Wheat futures have now removed the entire Ukraine-Russia premium that was put into place following the invasion last month, as speculative traders decide that wheat does not deserve such a high risk premium

Aug LC up 2.775 @ 135.350 & Aug FC up 1.325 @ 174.950
Both live and feeder cattle contracts are higher this morning with live cattle leading the way and feeders boosted by lower corn
Cash trade is relatively quiet as most of the business is done for the week and marked mostly at 138 in the South, steady to a dollar lower, and 234 in the North, steady with last week
Weakness in corn should provide better margins for beef production and may allow feedlots more confidence for higher cash next week
Choice cuts down 0.88 and select down 0.24
Cattle slaughter projected at 119K
CME Feeder Cattle Index for 6/30: up 2.36 @ 166.44

Jul hogs up 0.950 @ 110.125 & Jul pork cutout down 0.200 @ 110.400
Hogs are higher this morning despite a drop in cash and the cutout being down 1.31 yesterday afternoon at 107.25
Projected slaughter has been revised to be significantly lower than previously reported by 42k head as slaughter paces continue to lag
Tight hog supplies and good export numbers yesterday are giving traders more confidence to be long hogs
National Direct Afternoon report has cash down 2.27
Hog slaughter projected at 426K
CME Lean Hog Index for 7/1: down 0.42 @ 110.84

Amanda Brill