TFM Midday Update 12-5-2022

Provided by Stewart-Peterson Inc.

CORN

  • March corn down 5 @ 6.41
  • The DTN national corn basis is still the strongest level in 20 years (14 cents above March)
  • US gasoline demand (since September 1st) is down 6.4% from last year, raising concerns about ethanol demand
  • The EU put a cap of $60 per barrel of crude oil coming out of Russia
  • US corn exports remain poor and that has been pressuring the market
  • There may be a cut to the export estimate on Friday’s USDA report

SOYBEANS

  • January soybeans up 5 @ 14.43
  • December 9 is the next USDA report – broad changes are not expected at this time, but exports might be lowered
  • The 7-day forecast is mostly favorable for Brazil but Argentina is dry and expecting triple digit temperatures this week
  • China is relaxing some covid restrictions which may help the grain and crude oil markets
  • Brazil soybean planting is said to be 91% complete (vs 94% last year)
  • January soybeans on China’s Dalian exchange remain expensive, around the equivalent of $19.71 per bushel

 

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WHEAT

  • March Chi wheat down 17 @ 7.44, March KC down 18 @ 8.53, & March MNPLS down 8 @ 9.13
  • US southern plains remain dry overall
  • Last week Chicago wheat hit the lowest level since February
  • Poor US wheat export numbers have been weighing on the market
  • Ukraine’s wheat production is about half of what it was before the war began
  • Funds are net short about 60,000 contracts of Chicago wheat
  • Wheat futures remain technically oversold

CATTLE

  • Feb LC up 0.200 @ 156.075 & Jan FC up 1.375 @ 183.825
  • Live cattle remain in an overall uptrend
  • Cash cattle were steady to higher last week (northern up to $4 higher)
  • Strong demand is keeping packers aggressive
  • Choice cuts down 3.65 and select down 0.44
  • Cattle slaughter projected at 126K
  • CME Feeder Cattle Index for 12/2: up 0.63 @ 179.03

HOGS

  • Dec hogs down 0.325 @ 82.100 & Dec pork cutout down 0.175 @ 89.650
  • December hogs have 1-1/2 weeks before expiration
  • Higher cutouts were supportive as demand may be increasing
  • June contracts onward made new highs
  • Packer activity may be light today as they assess weekend pork movement
  • National Direct Afternoon report declined 3.04
  • Hog slaughter projected at 491K
  • CME Lean Hog Index for 12/5: down 0.37 @ 82.87

Author

Brandon Doherty

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