TFM Midday Update 2-7-2023

CORN

Mar corn down 2 @ 6.77
Corn is trading lower again today but remains very rangebound holding just above the 100-day moving average
The sluggish export pace has been a bearish factor as better sales were expected but Brazil still has cheaper corn to sell taking business away from the US
Tomorrow’s WASDE report is not expected to have many surprises but changes to exports may be made as well as changes to South American production
The Dollar is higher again today which is pressuring both corn and beans

Mar soybeans down 4 @ 15.17
Soybeans are falling again today getting dragged lower by meal which is down 2% in the March contract while bean oil is higher by 2.30% in March
Crude oil is nearly 2 dollars a barrel higher as it found a bit of a floor yesterday near 72 dollars a barrel as trade expects the administration to refill reserves near 70 a barrel
Tomorrow’s WASDE report may show an increase in exports which shouldn’t come as much of a shock since weekly export sales have been consistently strong
South American soybean production will likely get some attention with tomorrow’s report but we will see if there is an increase in Brazilian production to offset Argentina’s losses

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Mar Chi wheat up 3 @ 7.54, Mar KC up 10 @ 8.86, & Mar MNPLS up 1 @ 9.18
Wheat is the only grain that’s moving higher today which is surprising given the higher dollar
KC wheat has been leading the wheat complex higher with March futures holding an 11 cent premium to May indicating good domestic demand
Canada released their stocks of principal field crops which showed total wheat stocks as of December 31 at 22.294 mmt
Russia’s IKAR consultancy reduced their estimates for their crop from 87 mmt to 84 mmt due to weather issues

Apr LC down 0.275 @ 164.200 & Mar FC up 0.600 @ 188.300
Live cattle are trading lower while feeders are higher and are getting the benefit from lower corn futures
The expectation is for cash to trade higher again this week as packers are not well bought ahead and may need to step up
The reversal in boxed beef higher is supportive as well as it improves packer margins
Choice cuts up 1.83 and select up 2.11
Cattle slaughter projected at 126K
CME Feeder Cattle Index for 2/6: down 0.16 @ 181.29

Apr hogs up 0.675 @ 83.125 & Apr pork cutout down 0.525 @ 90.175
Hogs are trading higher in the nearby months but lower in deferred contracts as cash fell but a nice jump in the cutouts of 2.53 led by bellies which were up 8.35
The April contract made new lows on the open but has bounced back over a dollar since then trying to stay above support
Hogs continue to struggle finding footing with fast slaughter pace and pork supply that is far exceeding demand
National Direct Afternoon report fell by 0.31
Hog slaughter projected at 489K
CME Lean Hog Index for 2/7: up 0.24 @ 73.29

Amanda Brill