TFM Midday Update 08-15-2022

Provided by Stewart-Peterson Inc.

CORN

Sep corn down 18 @ 6.21
Corn futures are lower to start the morning as weather forecasts have shifted to be cooler across most of the Corn Belt, with increased chances for rain in Nebraska into Iowa
Forecasts are predicting 1/2 to as much as 2-1/2 inches of rain for the driest areas of Nebraska, Kansas, western Iowa, and Missouri
On Friday the USDA lowered yields to 175.4 bpa, but next month’s report will likely be more accurate, as actual field observations will be included
The Chinese economy has continued to slow following more lockdown measures, and the country just surprisingly dropped one-year lending rates to 2.75%

Sep soybeans down 57 @ 14.79
The entire soy complex is lower due to a combination of improved weather, lower crude oil, and demand worries as China’s economy slows
On the Dalian exchange, September soybeans are down and trading at the equivalent of $20.05 a bushel, and soybean prices in China are at their highest levels in over a month
On Friday the USDA increased their yield estimate to 51.9 bpa, higher than the average trade guess, but next month’s report should give more clarity as the crop develops
Soybean crush incentives are high which should eventually lend some support to Sep beans

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Sep wheat down 11 @ 7.96, Sep KC down 10 @ 8.79, & Sep MNPLS down 14 @ 9.05
Wheat is lower with the rest of the grain complex but there is not much rain forecast west of eastern North Dakota for the next 14 days and temperatures in that area will be hot as well
16 ships carrying grain have now left Ukrainian ports but again, wheat has not been mentioned
French wheat prices dropped 2% today which has added bearish pressure to US markets
The USDA raised Russia’s wheat crop estimate by 6.5 mmt on Friday, but they also estimated the lowest global wheat stocks outside of China in 15 years

Aug LC up 0.075 @ 140.300 & Aug FC up 0.675 @ 180.300
Front month live cattle are slightly higher while feeders are up over a dollar with significantly lower gains
China has reported that they were halting imports of beef and pork from Australia and New Zealand for no apparent reason other than political, and there is a fear they will ban US imports as well
On Friday the USDA estimated higher beef production this year compared to their previous estimates increasing production by 68 million pounds
Choice cuts up 0.27 and select up 2.13
Cattle slaughter projected at 123K
CME Feeder Cattle Index for 8/12: up 0.22 @ 178.28

Oct hogs down 0.500 @ 99.525 & Oct pork cutout down 1.025 @ 108.950
Hogs are lower this morning as grain prices have fallen sharply and the cutout did not perform as well as it had been last week
Cash broke its normal trend and gained this past Friday while the cutout fell by 1.48
The slowing of the cutout may indicate falling demand as tensions with China remain and the country reported that they were no longer importing pork or beef from Australia or New Zealand
National Direct Afternoon report rose 2.32
Hog slaughter projected at 459K
CME Lean Hog Index for 8/15: up 0.07 @ 121.93

Amanda Brill