TFM Sunrise Update 04-12-2022


The corn market is higher this morning with both, the May and December contracts up 8 cents at 7.72-1/2 and 7.26 respectively.  Monday, the USDA announced 1,020,000 mt of corn sold to China, 680,000 mt for 2021/22 and 340,000 mt for 2022/23. There are thought that Managed funds may be reducing longs before the long Easter weekend.  They are thought to be sellers of an estimated 1,000 contracts on Monday and are now estimated to be long 370,000.  Trade estimates that US corn planting pace is near 2% complete versus 4% on average. The forecast for the next two weeks continues to be warm and dry to the west and cool and wet in the east, raising concerns about possible planting delays.  Central Brazil is dry.  Which is adding concern, with about 60% of the crop in pollination at this point.



The soybean complex is higher this morning following a firm opening and higher trade overnight.  The May contract is up 17-3/4 cents at 16.73, and the new crop November contract is up 11-1/4 cents at 14.97.  As for the products, May soybean meal is up $4.60 at 463.70 and May soybean oil is up 1.16 cents at 75.46.  Higher energy prices and talk of increased US export demand helped rally prices overnight.  There are thoughts that managed funds reduced their soybean long position on concerns regarding China demand and risk of wild trade volume that could trend lower after the Easter holiday weekend.  They are thought to have been sellers of an estimated 14,000 contracts on Monday and are now estimated to be long 165,000.  There are also concerns that delays in planting the 2022 corn crop could add to final soybean plantings.  There is a possibility that export demand may increase later this summer with US soybeans being cheapest from July forward, and thoughts that China’s soybean coverage is only about 10-15% June forward.


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All three wheat classes are trading higher this morning with May Chicago wheat up 31-3/4 cents at 11.13, May KC wheat is up 26-1/2 cents at 11.68, and May Minneapolis wheat is up 16-1/2 cents at 11.57.  The USDA rated the 2022 winter wheat crop the 4th lowest, with a rating of 32% G/E versus 30% last week and 53% last year.  Season to date exports are down 141 million bu. near 647 million versus last year’s 788 million. Some in the trade believe that final US wheat exports could be near 830 million bu. with carryout close to 590 million versus the USDA estimate of 678 million.  Managed funds are thought to have been buyers of an estimated 12,000 Chicago wheat contracts on Monday and are now estimated to be long 27,000.  Dry weather forecasted for the next two weeks continues to add support to the market.



The cattle market is called to open mixed to higher.

Cattle futures finished higher to start the week as demand optimism, and calmer afternoon trade in grain markets brought buyers into the cattle markets. Resistance is the 200-day moving average overtop near $135.500.  Chart will stay concerning the longer the market trades under this value. The cash market will likely dictate prices again this week.  A strong winter storm forecasted for the northern plain this week could provide some support.  Cash bids and asks were undefined to start the week, typical of Monday.  Expectations are for cash levels to remain mostly steady with last week. Beef cutouts were mixed at the close (Choice 272.11, +1.64, Select 260.29, -04), with light box movement of 82 loads.  Moving past the Easter holiday could help spur some retailer buying as store prepare for May and the expected uptick in grilling demand.  The feeder market climbed nicely off early session lows as the corn market calmed during Monday trade. Feeder price action was very positive, with closing trade at the top end of Monday’s range and well-off the lows, could open the upside more. Cattle prices are trying to battle, but both live cattle and feeder cattle have strong resistance overtop the market. Cash will be king, and the market may need to see those prices firm. Charts are still weak overall and are still very susceptible to a test of the recent low.



The hog market is called to open mixed to higher.

Hog futures finished mostly higher, as afternoon price action was strong, and prices moved to the upside for the close. Jun hogs stayed in a consolidation pattern, building a “bear flag”, as the Jun hogs have stayed below the 50-day moving average. This keeps the door open for a test of the 100-day and trendline support as low as $104. June has traded sideways for the past four days, but Monday’s close was at the top of the trading range and could see some follow through strength on Tuesday. June is holding a strong premium to the cash market and the cash index.  The market is content to possibly take that premium out. The cash market trade was softer in midday trade. National Direct midday values were .50 lower at 96.03, and the 5-day average is at 99.46, breaking back under the $100 barrier. The Lean Hog Index was lower, losing 0.62 to 100.06. Pork carcass values surged higher at midday gaining 8.59 and held a portion of those gains into the close, finishing 3.48 higher to 106.64. The load count of 253 loads. The firm retail close should help support opening values. The hog market numbers are still tight, and the rate of slaughter may be our first indicator of supplies tightening.  Technically, hog charts looked challenged and could be poised to test lower levels. The trend lower in cash prices is concerning, but a spring tick up in retail values could be the key for building some footing for hog prices.



Scott Masters

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