TFM Sunrise Update 03-22-2022


Corn futures were narrowly mixed overnight as the market gleans underlying support from higher overnight wheat trade, a 2.30 drop in crude and a 30 basis point hike in the dollar.  Nearby May corn is fractionally higher to 7.56-3/4.  December futures are up a nickel to 6.69 after matching Monday’s contract high of 6.70.  Informa will be out today with 2022 corn acres estimate ahead of the March 31 USDA Prospective Plantings report. Most estimates are near USDA’s current 92 mil benchmark at 92.2 vs 93.4 last year.  Basis bids for corn shipped by barge to U.S. Gulf Coast export terminals were around steady on Monday, capped by rising futures prices and weakening freight costs but underpinned by solid export demand, traders said.


Soybean futures were higher overnight with May beans peaking at 17.20-3/4 on gains of 29-3/4 before slumping to 16.99.  November beans are up 9 cents this morning to 14.8701/4 with an overnight high etched at 15.12-3/4.  May meal is down 3.50 to 4.77.80.  May soy oil is up .47 to 74.1.  A lack of new U.S. soybean sales for last several days suggests May beans could be near a high.  It has been 10 days since China has bought US 2022/23 soybean and 2 weeks buying 2021/22 soybeans.  In addition, weather experts appear to be turning to a more normal U.S. spring weather forecast or the Midwest and Plains.  Informa is out today with 2022 soybean acres estimate.  Most are near 88.3 vs 87.2 last year.  Overnight, Dalian soybeans, soymeal, soyoil, palmoil and corn were higher.  Malaysian palm oil prices overnight were up 183 ringgit (+3.17%) at 5957.

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Wheat futures traded sharply higher overnight overnight as ongoing concerns in Ukraine buoy prices and solidify a near term low.  Russia has increased attacks on Ukraine port cites, thus further elevating concerns about the Black Sea wheat exports.  It is becoming widely accepted that normal commerce would take months to achieve once the war ends.  May Chicago futures rose 48-3/4 cents to 11.68 before trimming gains.  May KC wheat hit 11.55, and is up 33-1/2 cents this morning to 11.46-3/4.  May MPLS spring wheat is up 27-1/4 cents to 11.16 versus last night’s high of 11.23.   Weekend rains in the U.S. Plains is helping the HRW wheat crop, and helped firm up spot basis bids across Kansas on Monday.  Meanwhile, too much rain is falling across SRW areas.  Informa will project their 2022 wheat acres estimate today.  Most estimates are near 48.4 vs 46.7 last year.


Cattle are called steady to higher.  The cash market will still be the key as cattle markets are trying to build a path higher.  Gains may be limited with overall demand concerns and available consumer dollars.   April cattle stay resilient to start the week.  Despite the selling pressure in the cattle complex, the nearby contract held above the 200-day moving average on the close, and consolidated off Friday’s trade, as it feels like prices want to work higher.  Cash trade was typically quiet to start the week as bids and asking prices were undefined.  Expectations are for some support in the cash market this week, supported by the strong retail values.  Boxed beef was higher, (Choice: +.34 to 2598.50, Select: +1.85 to 252.50) with demand light at 88 loads.  The stronger demand tone could be the support the cattle market needs to build cash trade.  A concern in the feeders is the premium of the futures market to the cash index, which will limit gains.  The feeder cattle cash index was .08 higher to 154.93.  The index is trading at a $1.17 discount to futures and that likely limited the gains in the front month contract.


Hogs are called steady to higher on follow-through from triple digit gains yesterday amid strong demand and firm cash markets.  The price move on Monday was also technical as prices saw some recovery off last week’s break lower.  There is a possibility that sideways trade may be starting to develop.  The fundamentals will be the key.  The April hogs bounced off support of the 50-day moving average and trended higher during the trading session, but still have resistance over top.  The April chart still looks concerning for further downside, even with the strength on Monday.  The summer months saw the buying strength, and are poised to retest last week’s high, and possible back to challenge the contract highs.   The Lean hog cash index was .59 higher to 101.36.  The April futures has dropped to a discount to the index, which could support the front month.  Pork cutouts were softer at the close, with cutouts trading 3.34 lower to 101.61, and a load count that was light at 305 loads.


Matthew Strelow

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