TFM Midday Update 09-12-2022

Provided by Stewart-Peterson Inc.

CORN

  • Dec corn down 4 @ 6.81
  • USDA is expected to lower the corn crop estimate on today’s report
  • The Fed is expected to again raise interest rates in September
  • Longer term, concerns about global food supply may support commodity prices
  • Today’s report will have the first field surveys

SOYBEANS

  • Nov soybeans up 6 @ 14.18
  • Inflation and recession could lead to slower demand for fuel and food (especially in China)
  • Brazil and Argentina continue to compete for US bean, meal, and oil exports (which could ultimately raise our 22/23 soybean carryout)
  • Argentina farmers recently sold 4 mmt of soybeans after their government established a more favorable exchange rate
  • Pre-report average estimate of 51.5 bpa soybean yield

 

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WHEAT

  • Dec wheat down 17 @ 8.52, Dec KC down 9 @ 9.20, & Dec MNPLS down 13 @ 9.14
  • Combat in eastern Ukraine may delay or reduce winter wheat planting
  • US HRW wheat areas remain affected by drought
  • The US dollar remains relatively elevated, which may reduce bullish potential for wheat
  • Many think that Putin is unlikely to extend the Ukraine export corridor deal (and he is meeting with Turkey’s Erdogan this week to discuss the deal)
  • There was frost / freezing conditions in Argentina over the weekend which may have affected their wheat crop

CATTLE

  • Oct LC down 0.125 @ 145.550 & Sep FC down 0.925 @ 182.075
  • A lower US dollar on Friday helped most commodities (including cattle)
  • Anticipation of packers being more aggressive this week
  • Corn prices trending higher may limit feedlots holding out for higher cattle prices
  • Slaughter pace remains strong
  • Choice cuts down 0.75 and select down 1.31
  • Cattle slaughter projected at 125K
  • CME Feeder Cattle Index for 9/9: up 0.93 @ 181.24

HOGS

  • Oct hogs down 1.275 @ 91.900 & Oct pork cutout down 1.050 @ 101.900
  • October hog futures are still at a steep discount to the index
  • Increasing hog slaughter is an indication of strong consumer demand
  • Packer margins are low which may leave them less aggressive in the cash market
  • National Direct Afternoon report declined 3.70
  • Hog slaughter projected at 477K
  • CME Lean Hog Index for 9/12: down 0.69 @ 99.57

Author

Brandon Doherty

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