TFM Sunrise Update 03-23-2022


Corn futures were firm overnight allowing the December contract to ease into another new contract high.  The new crop contract rose 3-1/2 cents to 6.73-1/2.  Nearby May corn was up 4-1/2 to 7.57-1/2 while consolidating near contract high resistance in a recent range from 7.25 to 7.80.  Look for more choppy trade in the nearbys until we get next week’s March 31st Prospective Plantings report from the USDA.  Prices remain underpinned by a tighter global supply due to a lower South American crop, high fertilizer and fuel costs and the stress from the war in Ukraine.  China may need to buy more U.S. corn to fulfill demand needs.  Weekly Ethanol Stats will be out today, Exports tomorrow.  In outside markets, crude is up 1.92 and the dollar is up 11 basis points.  Stock index futures are mixed with a  higher bias as Biden’s trip to Europe to address Russia’s sanctions and join NATO allies to talk about Ukraine aid.


Soybean futures were higher overnight with May beans up 14 cents to 17.10-1/2 while staying inside Tuesday’s trading range.  November beans were up 10-1/2 cents to 15.08-1/2.  May Meal rose 5.0 to 481-80, hovering just below $500 per ton.  May soy oil was up .83 to 75.37.  For the 4th straight day Matif rapeseed futures made new all time highs.  Overnight, Chinese May bean futures were down 30 yuan; Soymeal up 24; Soyoil down 76; Palm oil up 258; Corn up 3 and Malaysian palm oil prices were up 228 ringgit (+3.82%) at 6195.  It’s been roughly 2 weeks since China bought U.S. soybeans as the May bean contract respects upward trending moving average support.  Traders are eyeing next week’s Prospective Plantings report as potential catalyst to the next source of price direction.  Nearly 70% of Brazil’s beans have been harvested.  On Tuesday, Managed funds were net buyers of 3,000 soybeans and soymeal and sold 4,000 soyoil.  The are now estimated to be
long 196,000 soybeans, 116,000 soymeal and 98,000 soyoil.

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Wheat futures continued to plot a higher course for the week overnight as the war in Ukraine continues to drive the market in an upward direction.  May Chicago wheat was up 19 cents to 11.37-1/4.  On Tuesday, Managed funds were net buyers of 2,000 Chicago wheat putting their long position at an estimated 33,000 wheat contracts. The nearby KC contract rose 16-1/2 cents to 11.33 last night.  May MPLS wheat was up 15-1/4 cents to 11.11.  Ukraine’s ban on exports is vital to their food security, so even if wheat if harvested there it likely won’t get shipped, causing a ripple effect on the global availability of wheat.  For the first time ever, Egypt announced they’ll be looking to source wheat from India to meet their needs.  Moisture in the U.S. south Plains is helping the 2022 HRW crop especially east and south.


Cattle are called mixed after failing to hold gains so far this week.  We’ll get a Cattle on Feed report after the close on Friday.  April cattle, at 139.42 have been unable to sustain a move through 100-day moving average resistance currently etched at 137.32.  June cattle closed at 135.70, between that contract’s 100-day MA at 137.32 and 200-day MA support down at 135.02.  The Fed Cattle Exchange will trade today.  Packer bids have been a moving target in the low $140s as futures keep moving about despite little change in the fundamental picture.  However, volatile weather in the south has slowed the daily slaughter to 119,000 down from 125,0000 last week.   A lingering concern in the feeders is the premium of the futures market to the cash index, which will limit gains.


Hogs are called steady to higher after managing closes near their session highs on Tuesday.  Underlying support stems from ideas that pork demand will improve due to the spread of bird flu.  As of March 14, an estimated 4 million turkeys and chickens have been culled since February due to the outbreak.  The June contract, at 120.07 holds the highest open interest in the hog complex and appears poised to take out last week’s contract high of 122.00 should the up-trend continues.



Matthew Strelow

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