TFM Midday Update 12-27-2022

Provided by Stewart-Peterson Inc.

CORN

Mar corn up 6 @ 6.72
Corn broke out above its 100-day moving average on the open and has only slipped slightly from the day’s highs
The move higher comes as Argentina endured another dry weekend and China announced that they are lifting quarantine requirements for travelers on Jan 8
Export demand has been slow but there was a flash sale of 5.9 mb to Mexico and 177,500 mt for delivery to Japan
Last week non-commercials were net sellers of corn reducing their net long position by 13,291 contracts to 113,815 contracts

Jan soybeans up 8 @ 14.87
Soybeans and bean oil surged higher this morning with soybeans gapping up and breaking through the 15-dollar level as world veg oil markets move higher
Indonesia’s president said he will announce a commodity export ban on Wednesday which may include palm oil, which holds the world’s largest share of the veg oil market
China’s announcement to lift Covid restrictions and allow travelers to enter the country has been bullish, but increasing Covid cases may effect demand
Non-commercials were buyers of soybeans last week and added 3,989 contracts to their net long position increasing it to 123,569 contracts

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Mar Chi wheat up 1 @ 7.76, Mar KC up 7 @ 8.82, & Mar MNPLS up 4 @ 9.35
Wheat futures are mixed with Chicago trading slightly lower but KC moving higher as the sub-zero temperatures have undoubtedly resulted in some winter kill damage
In Ukraine, Russia continues to hit the East with drone and missile strikes while simultaneously saying that they are ready to negotiate peace talks
Egypt and Romania have been purchasing wheat from Russia as their falling ruble makes their wheat extremely cheap compared to US
Non-commercials were buyers of wheat last week buying 3,693 contracts and reducing their net short position to 59,311 contracts

Feb LC down 0.125 @ 156.775 & Jan FC down 1.100 @ 182.900
Both live and feeder cattle are trading lower following gains in corn
Cash traded a dollar higher in both the North and South last week while boxed beef exploded higher increasing packer margins
The Cattle on Feed report was mixed with on feed at 97%, placements at 98%, and marketings at 101%, with only placements being higher than the average guess of 95.7%
Choice cuts up 6.74 and select up 3.66
Cattle slaughter projected at 122K
CME Feeder Cattle Index for 12/23: down 1.08 @ 176.75

Feb hogs up 1.975 @ 89.825 & Feb pork cutout up 1.725 @ 96.600
Hogs are trading higher in the front months but lower in deferred after cutouts posted a nice gain of 3.30
The Hogs and Pigs report was neutral with all hogs and pigs 0.5% below trade expectations and marketings 0.4% below expectations, but kept for breeding was 0.3% above estimates
Funds were net buyers of hogs last week increasing their net long position by 3,703 contracts to 36,386 contracts
National Direct Afternoon report 5-day average @ 79.66
Hog slaughter projected at 487K
CME Lean Hog Index for 12/27: down 0.93 @ 78.74

Amanda Brill