TFM Midday Update 07-29-2022

Provided by Stewart-Peterson Inc.

CORN

Sep corn up 6 @ 6.21
Starting Monday, the Midwest will have 2 weeks of warm and dry conditions
The corn crop is probably far enough along that weather is not as much of a concern for yield as it is for soybeans
The European Union may end up being a net buyer of corn instead of a net exporter due to struggling with heat and dryness that has affected their corn crop
Brazil’s corn harvest is on track for record production
September corn on China’s Dalian exchange is around the equivalent of $10.05 per bushel

Sep soybeans up 45 @ 15.02
Weather is the main driving factor in the soybean market right now
Domestic soybean crush margins are very firm which is incentivizing processors
There was a bill passed in the house that will allow for an increase in biofuel demand which could help soybean oil
Chinese Dalian soybean oil and palm oil futures are trading higher

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Sep wheat up 3 @ 8.20, Sep KC up 2 @ 8.92, & Sep MNPLS up 1 @ 9.29
One vessel may be shipped out of Ukraine today but overall there is concern about risk – some vessel owners may not want to ship even if they can get insurance
News outlets reported new missile attacks north of Kyiv on Thursday
The spring wheat tour found one of the highest yields in the US since 2015 at 49.1 bpa
Ukraine has harvested 29% of their winter wheat
There is concern about deteriorating quality of grain in some of the vessels that have been sitting in Ukraine since the war began

Aug LC up 0.075 @ 136.250 & Aug FC unchanged @ 177.425
High priced feed and drought are both affecting the need to move cattle
Supply is still expected to eventually tighten
Recession remains a concern for demand as GDP fell for the 2nd consecutive quarter
Choice cuts down 0.22 and select down 1.00
Cattle slaughter projected at 120K
CME Feeder Cattle Index for 7/28: up 1.91 @ 172.55

Aug hogs up 1.600 @ 120.725 & Aug pork cutout unchanged @ 124.550
China continues to purchase on a weekly basis
As inflation and food prices increase, consumers may purchase more pork (vs beef)
Cutouts were 2.00 higher, but there was a large decline in cash
National Direct Afternoon report declined 10.86
Hog slaughter projected at 439K
CME Lean Hog Index for 7/29: up 0.85 @ 120.58

Brandon Doherty