TFM Sunrise Update 03-04-2022


Corn futures were up overnight led by new crop contracts.  May corn managed a double-digit gain to make new highs for the fourth consecutive day.  The contract rose 24-1/4 cents to 7.72 before trimming gains to 7.63.  December corn was up as much as 20 cents to 6.32.  For the week, May is up $1.10 per bushel.  Dec is up 54 cents.  The dollar sharply higher to a new high this morning, and Crude is up 2.40 per barrel.  Stock index futures are down 240 basis points.  On Thursday, Managed funds were net buyers of 25,000 corn pushing their total to an estimated 449,000 contracts.  Russia’s invasion of Ukraine continues to drive the volatility in a plethora of markets and indexes.  More seasonal news pertaining to South America’s row crops include dry weather in central Brazil raising concern about their 2nd corn crop outlook.  The crop could be below 110 mmt.  In Argentina, rains over the last few days have improved water reserves for late planted corn that is entering key growth stages.  Corn estimates are kept at 51 mil tons.  Overall, heading into the 2022 U.S. planting season, trade rhetoric includes talk that the World is one bad U.S. crop from a disastrous low grain and oilseed supply.


The soy complex traded two-sided overnight.  May beans are actively trading both sides of Thursday’s settlement price, marking a range from 16.53 to 16.81-3/4.  Most bean contracts are up a nickel this morning.  For the week, the May contract has traded an 86 cent range between 16.13 and 16.99 versus last week’ s $1.80-1/4 range from 15.79 to 17.59-1/4.  May meal is up 9.20 per ton to 462.60; And, May soybean oil is retreating 1.70 from yesterday’s new high to 73.11.  On Thursday, Managed funds were net buyers 6,000 soybeans and 3,000 soymeal and sold 3,000 soyoil.  They are now estimated to be long 189,000 soybeans, 91,000 soymeal and 97,000 soyoil.  Looking ahead to the March monthly USDA report next week, USDA will need to decide either use CONAB’s Brazil soybean crop of forecast of 125 or trade estimate of 129.  Overnight, Chinese Ag futures had May soybeans down 56 yuan; Soymeal up 18; Soyoil down 232; Palm oil down 462; Corn up 14;  Malaysian palm oil prices overnight were down 532 ringgit (-7.81%) at 6276.  Palm oil inventories in Malaysia probably dropped to a 14-month low as production slumped for a fourth straight month because of a chronic labor shortage in the world’s second-biggest grower in a survey of analysts, traders and plantation executives.

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Wheat futures continue to blast higher within another day of 75 cent per bushel expanded limits as Russia’s invasion of Ukraine invasion continues.  Russia’s capture of a Ukrainian nuclear power plant adds risk.  Ukraine claims that a reactor explosion would be 10 times worse than Chernobyl.  May Chicago futures gapped higher, and KC contracts are locked limit up this morning at new highs of 12.09 and 12.15-1/4, respectively.  For the week, the May Chicago contract has gained $3.49-3/4.  On Thursday, Managed funds were net buyers of 12,000 Chicago wheat pushing their total to an estimated 63,000 wheat.  May KC wheat advanced $3.34-1/4 this week.  MPLS is up it’s daily limit of 60 cents at 11.78-1/4 this morning.  For the week, the spring wheat contract is up $2.18 per bushel.  Year-To-Date nearby futures are up 74% in SRW, up 42% in HRW, up 17% in HRS.


Cattle futures are called steady to lower after long liquidation and technical selling pushed the markets to near-term lows, backed by a turn lower in cash trade and strong grain markets.  Apr cattle futures failed to hold support levels at the 200-day moving average and the trendline under the market prices, and the technical weakness is now challenging the uptrend in the market overall.  The market is still considered in a long-term uptrend but is searching for a near-term low.  The majority of this week’s cash trade was at $140, down $2 from last week, helping pressure the market.  Trade is likely done for the week with the exception of light clean up trade.  Retail values have been trending lower, and that has limited cash bids.  At the close, boxed beef prices were lower, (choice: -1.37 to 254.35, select: -3.55 to 247.79) with demand light at 153 loads.  The grain markets were sharply higher most of the trading day, and that pushed feeder markets to triple digit losses.  The Feeder Cattle Cash Index was 1.47 lower to 157.78 and trading at a small premium to the futures market. The direction of the grain markets will have a large impact of feeder cattle going into the end of the week.


Hogs are called mixed.  The fundamentals stay supportive overall and the market is still in a strong uptrend, but more downside pressure is possible.  Hog futures saw mixed to lower trade  yesterday pressured by triple digit losses in the April contract.  Prices are still consolidating off the most recent moves.  Apr hogs traded between the 10 and 20-day moving average.  The April chart is building a “bear Flag” pattern with a series of higher highs and higher lows, setting up a potential break to the downside, and a test of the $100.00 level.  Pork cutout values maintained their strong value.  At the close on Thursday, pork carcasses gave up mid-session gains, closing lower, losing 2.01 to 106.41.  The load count was moderate at 360 loads.  Weekly export sales saw a jump higher last week with new sales at 42,200MT up 59% from last week and 80% from the 4-week average.  Cash was supportive with the National Direct morning trade marking a base price of 94.48, up 4.75 from Wednesday and the Cash Lean Hog Index was 0.18 higher to 99.84.  The Apr futures is still holding a 5.360  premium to the index, which could pressure the market.


Matthew Strelow

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