TFM Midday Update 2-6-2023

CORN

Mar corn down 3 @ 6.74
Corn is trading lower this morning thanks to a higher dollar, improved Argentinian corn ratings, and poor export sales commitments
The recent rains in Argentina did in fact improve their corn crop with the good to excellent rating rising to 12% from 7%
The US Dollar is moving sharply higher again which especially puts pressure on corn and wheat as US grains are already far more expensive that offerings from Ukraine and Russia
Export sales commitments for 22/23 are 43% less than a year ago as cheaper corn is being sold in Brazil and Ukraine

Mar soybeans down 11 @ 15.22
Soybeans are trading lower due to a sell off in bean meal, and bean oil is lower as well as crude slips and the dollar moves higher
Brazil’s harvest is now around 10% complete and estimates are pointing towards a record crop of around 5.62 billion bushels
About 478 million bushels of Brazilian beans are harvested at this point which is below the yearly average, but premiums are slipping giving Brazil the competitive edge for exports
The Chinese surveillance balloons that were shot down over the US have done nothing to improve relationships and will likely have a bearish effect on markets

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Mar Chi wheat down 6 @ 7.50, Mar KC down 1 @ 8.74, & Mar MNPLS down 3 @ 9.18
Wheat is getting beat up the hardest by the higher dollar as US exports have already been a struggle as Russian and Ukraine are able to sell their wheat for much cheaper
Russia’s IKAR consultancy reduced their estimates for their crop from 87 mmt to 84 mmt due to weather issues
The US wheat belt has received plenty of rains lately, but drought conditions are still an issue from Nebraska to Kansas
US wheat stocks were 1.28 bb as of December 1 and are on track to finish the marketing year at the lowest levels in 15 years

Apr LC up 0.325 @ 164.450 & Mar FC up 1.075 @ 187.375
Both live and feeder cattle are trading higher today thanks to higher cash trade last week and lower corn prices
Feedlots held strong on Friday and refused steady cash with the majority of cash deals done at 250 in the North, 2 dollars higher that last week, and 159 in the South, 3 dollars better
Lower boxed beef may keep packers hesitant to bid up for cash again this week
Choice cuts down 0.36 and select down 2.05
Cattle slaughter projected at 125K
CME Feeder Cattle Index for 2/3: up 0.55 @ 181.45

Apr hogs down 3.350 @ 83.125 & Apr pork cutout down 2.800 @ 90.750
Hogs are trading lower this morning with cash lower and a decline in the cutouts of 2.45
Slaughter pace has been the biggest bearish influence as packers are having little difficulty acquiring hogs and flooding the market with pork
Until cutouts bottom out and stabilize futures will have trouble working higher
National Direct Afternoon report fell by 0.26
Hog slaughter projected at 489K
CME Lean Hog Index for 2/6: up 0.20 @ 73.05

Amanda Brill