TFM Midday Update 10-31-2022

Provided by Stewart-Peterson Inc.

CORN

Dec corn up 8 @ 6.88
Corn is following wheat higher, moving sharply after Russia moves to pull out of the grain deal following strikes on the Crimean port
Corn gapped higher on the open, but again battled and failed at the 7-dollar resistance level
Harvest is wrapping up, and yields in the upper Midwest have been coming in better than expected thanks to late season rains
Friday’s Commitment of Traders showed funds as buyers of corn increasing their net long position by 10,113 contracts to 264,374 contracts

Nov soybeans up 2 @ 13.90
Soybeans are slightly higher and have not enjoyed the same increase as corn and wheat as China braces for more lockdowns with Covid spreading in the city of Zhengzhou
China has proven that they still need soybeans during lockdown periods so demand shouldn’t take a big hit, but China will still look to South America for purchases first
Soybean oil continues to move higher almost approaching contract highs as palm oil rallies supporting crush margins to reach record highs
Friday’s CoT showed funds buying 8,549 contracts increasing their net long position to 75,411 contracts, the largest position in a month

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Dec wheat up 31 @ 8.59, Dec KC up 30 @ 9.56, & Dec MNPLS up 20 @ 9.64
Wheat has backed off a bit from early highs, which were as much as 55 cents higher, but is still sharply higher and bringing the other grains higher with it
In response to attacks on the Russian occupied Black Sea port of Sevastopol, Russia said over the weekend that it would halt participation in exporting agricultural products from Ukrainian ports
Following this news, it is now extremely unlikely that the UN brokered deal allowing Ukraine to export out of the Black Sea will be renewed
Non-commercials added to their short position last week by 14,001 contracts leaving them net short 36,052 contracts and scrambling to buy contracts back thanks to this weekend’s news

Dec LC down 0.700 @ 152.300 & Nov FC down 0.325 @ 177.550
Both live and feeder cattle are lower with feeders leading the way down on higher corn
Live cattle are experiencing spillover selling from feeders as corn and wheat surge higher
Cash traded 2 dollars higher last week at 150 in the South, and 5 dollars higher in the North at 240, while boxed beef traded higher
Last week’s Commitment of Traders showed funds increased their net long position by 27,526 contracts to 63,552 contracts
Choice cuts up 0.77 and select up 2.58
Cattle slaughter projected at 126K
CME Feeder Cattle Index for 10/28: up 1.07 @ 175.85

Dec hogs down 0.125 @ 85.975 & Dec pork cutout unchanged @ 95.850
December hogs are lower while all deferred months are higher as cash fell, but cutouts rose by 2.88, and funds were significant buyers last week
If the trend is followed this week cash should be lower today followed by a jump tomorrow as packers get aggressive with purchases
Dec hogs are at a 5-dollar discount to cash giving them plenty of room to run higher
Friday’s CoT showed funds adding 19,529 contracts to their net long position to 53,972 contracts
National Direct Afternoon report declined 1.15
Hog slaughter projected at 489K
CME Lean Hog Index for 10/31: down 0.38 @ 93.77

Amanda Brill