TFM Sunrise Update 03-28-2022


Corn futures were lower overnight with nearby May corn down 11-3/4 cents to 7.42-1/4, and Dec down 8 cents to 6.61.  On Friday, Managed funds were net buyers of 3,000 corn.  Going into last night’s session, they were estimated net long 391,000 contracts.  Talk that Russia may shift the war to east Ukraine could help Ukraine harvest fall crops and seed west and central spring crops.  Last night’s $4.60 pullback in crude, drop in wheat and beans combined with last Thursday’s slower weekly U.S. corn export sales and increased Brazilian corn export sales may be triggering some long liquidation before Thursday’s USDA acreage and stocks report.  Spot basis bids for corn strengthened across the U.S. Midwest on Friday at processors, elevators and ethanol plants.  However, basis bids shipped by barge to the U.S. Gulf Coast were mostly steady on Friday as recently easing barge freight rates stabilized and as export demand waned from high levels seen earlier in the month, traders said.  Weekly Export Inspections will come out mid-morning today.


The soybean complex traded lower to start the week.  May beans fell 20 cents to 16.90-1/4.  There is concern for now that China is buying more from Brazil that could translate to resistance to nearby soybean futures.  Between March 17 – 24, the American currency dropped sharply to the Real.  This scenario makes the commodities from the USA more attractive to importers.  Thus, liquidity has been lower at Brazilian ports last week compared to the previous week.  The November bean contract was down 16-1/2 cents overnight to 14.80-1/4.   May meal is down 3.70 this morning to 484.20.  Spot basis offers for U.S. soymeal were steady-to-weaker at U.S. rail terminals, while steady-to-firmer at truck loading facilities on Friday, brokers said.  May soyoil is down .64 to 674.11 this morning.  On Friday, Managed funds were net buyers of 5,000 soybeans, 1,000 soymeal and 1,000 soyoil.  They are estimated to be long 181,000 soybeans, 115,000 soymeal and 82,000 soyoil.  Month, and quarter-end positioning, as well as the March 31st USDA report will be key to soybean prices this week.  Last night, Chinese May bean futures were down 20 yuan; Soymeal down 75; Soyoil up 50; Palm oil up 114; Corn down 11.  Malaysian palm oil prices overnight were down 57 ringgit (-0.95%) at 5970.

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Wheat futures traded sharply lower overnight with May Chicago down 39 cents to 10.62-1/4 and KC down 34-1/2 cents to 10.76-1/4.  On Friday, Managed funds were net buyers of 9,000 Chicago wheat, and were long an estimated 6,000 contracts over the weekend.  U.S. export sales remain slow.  Some Russia wheat is being exported.  For now, India, EU and Australia exports are offsetting drop in Black Sea.  U.S. south Plains have seen improved weather.  May MPLS spring wheat futures were down 30 cents to 10.74-1/4.  Technically, prices are softening within a sideways consolidation range since pulling back off of contract highs two weeks ago.


Cattle are called mixed to lower.  Friday afternoon’s USDA Cattle on Feed report showed total On-Feed as of March 1 at 121.2 million head, or 101% of last year, which was inline with expectations.  Feeder Placements were at 109%, neat the top end of the range and above the expectations of 106.5% compared to last year.  Cattle marketed in February were at 105% of last year, slightly above trade estimates of 104.3%.  The placement number is the most concerning and will likely pressure the market today.  Cash trade last week was moderate and mostly steady at $138  live and $221 dressed.  The Choice cutout moved $5.36 higher last week, while Select added $191/cwt as seasonal buying interest increases.


Hogs are called mixed to higher after strong buying at the end of last week.  April hogs broke out of the most recent downturn, set up by Thursday’s firm close, triggering short covering and technical buying.  The contract is set up to challenge the recent Feb high at 112.85 as a possible near-term target.  New highs were posted in the summer contracts that could go higher based on supportive fundamentals.  Historical highs from 2014 could be taken out.  Cash has stayed supported by a strong retail market.  The April futures contract has surged 5.975 over the index which could limit upside movement with only 3 weeks left before expiration.



Matthew Strelow

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