TFM Midday Update 3-1-2023

CORN

May corn down 1 @ 6.29
Corn futures are oversold technically and at 6 month lows
May corn has lost over 50 cents in five days
Argentina farmers are protesting an export tax, but it is a big revenue generator for their government
China’s internal corn price lost 1.3% on Tuesday, reaching two-month lows
The Biden administration is recommending that some Midwest cities be allowed to offer E15 gasoline year round (starting in 2024)

May soybeans up 16 @ 14.95
China’s PMI data was better than expected which could suggest that their economy is improving post covid
February Brazil soybean exports were 7.7 mmt vs 6.2 mmt last year
Soybean crush remains highly profitable
Some private estimates are putting the Argentina soybean crop 6-8 mmt below the USDA’s estimate of 41 mmt
Palm oil is higher – heavy rains in southeast Asia are threatening production (this may be helping soybean oil)

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May Chi wheat up 5 @ 7.10, May KC up 5 @ 8.18, & May MNPLS down 5 @ 8.62
March Chicago wheat had the lowest close in 5 months
Wheat futures are technically oversold and may be searching for a bottom
Better chances for moisture in the US southwestern plains have added somewhat of a bearish tone
Hot dry weather is expected in India’s wheat growing region
The Ukraine ag minister expects 5.2 mmt of grain to have been exported in February
Ukraine is still trying to get an extension to the export deal with the addition of new ports

Apr LC down 0.600 @ 164.875 & Apr FC down 1.275 @ 193.800
Lower corn prices should be supportive to cattle
Asking prices by feedlots for cash cattle were $1-$2 higher than bids so no cash trade took place yesterday
April is now the front month for live cattle
Choice cuts up 0.61 and select unchanged
Cattle slaughter projected at 126K
CME Feeder Cattle Index for 2/28: up 0.38 @ 182.62

Apr hogs down 0.600 @ 84.575 & Apr pork cutout down 0.775 @ 90.925
April and May futures closed higher but deferred contracts could not do the same
Lower cutouts were unsupportive
The market needs to see improved demand to support futures
National Direct Afternoon report declined 0.11
Hog slaughter projected at 485K
CME Lean Hog Index for 3/1: up 0.29 @ 78.51

Brandon Doherty