The CME and Total Farm Marketing offices will be closed Friday, April 15, 2022, in observance of Good Friday
CORN
The corn market is up this morning with July corn trading 780-3/4 up 2-3/4 cents on the day and up 20 cents for the week. New crop December corn is 7.38-1/4, up 2-1/2 cents on the day and up 22-1/4 for the week. There are concerns that the rains in the Eastern Corn Belt may be slowing corn plantings, which could shift more acres to soybeans. A senior Ukrainian Ag official said that corn exports could drop to 17 mmt versus 23.1 exported last year. Making some in the market feel that the USDA’s 21/22 export estimate is too low and carryout too high, which could lead prices higher. Managed funds reportedly bought 8,000 contracts on Wednesday and are estimated to be long 386,000 contracts. The combined fund position totals are reported to be about 55% of the total open interest, which is historically high. Export sales will be released later this morning with estimates of 850-1,700 metric tons for old crop and 300-800 metric tons for new crop versus 782 and 145 respectively for last week.
SOYBEANS
The soybean complex is higher this morning with July soybeans trading at 16.76-3/4, up 11-3/4 cents on the day and up 8-3/4 cents for the week. New crop November soybeans are trading 15.13, up 7-1/4 on the day and up 17-1/2 cents for the week. As for soybean meal and soybean oil, their July contracts are trading near 458.5 and 76.15 respectively. China’s COVID lockdown’s have reportedly slowed down hog producers purchases of soybean meal. A senior Ukrainian Ag official said that sunflower oil exports could drop to 3.4 million metric tons from 5.3 million exported last year. The continued lack of Black Sea exports of sunflower oil have pushed prices higher and supports soybean oil and soybeans. Managed funds reportedly bought 6,000 contracts on Wednesday and are estimated to be long 178,000 contracts.
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WHEAT
All three wheat classes are firmer to start the day. July Chicago is 11.25-1/4 which is up 4 cents for the day and up 67 cents on the week. July KC is trading 11.81, up 3 cents for the day and up 71 cents on the week. The July Minneapolis contract is up 2 cents on the day at 11.61, which is up 34-3/4 cents for the week. Blizzards in North Dakota and Minnesota have brought some much-needed moisture, but also added to logistic challenges, and US HRW basis levels are firming due to logistic issues. Vladimir Putin made remarks that peace talks have reach a dead end and continued war in could reduce 2022 crop production. If the War worsens and new sanctions are placed on Russia, 22/23 exports out of the region could be limited further, especially when domestic flour and wheat prices are already at record levels. The market has been supported by talk of flour users adding Third Quarter coverage for their supplies.
CATTLE
The cattle market is called to open mixed to higher.
Cattle futures finished higher on Thursday as money flow stayed positive into the cattle market, supported by a trend higher in cash cattle markets this week. The June live cattle futures are battling higher, crossing more moving average resistance on Wednesday trade. More upside potential is available, especially with the improving cash trade. A strong resistance barrier will be at the 50-day and 100-day moving averages near $137.500. A break of this area will likely trigger additional technical buying. The cash market has been key this week, helping fuel the rally. Some very light trade triggered in the South at $139, up $1 over last week, and Northern dress trade today was $225-227, $2-4 higher than last week. There has been individual regional talk of firmer price levels, pushing values into the low $140 as packer inquiry has been stronger this week. Beef cutouts were very quiet at midday, and closed softer (Choice 272.36 -1.11, Select 259.37 -1.34), with box movement of 149 loads. The trend in Choice boxes this week has been firmer, helping support the cash trend. Moving past the Easter holiday should help spur some additional retail buying as stores prepare for May and the Memorial Day holiday, and the expected uptick in grilling demand. The feeder market used the support from live cattle to hold onto gains. The market saw early session strength, but that was pressured by a recovery in corn prices, as that market pushed to new highs on Wednesday. Apr feeders are likely tied to the index, which gained 0.05 to 155.81 but is running at a discount to front-month futures and could be a limiting factor. Cattle prices are turning the corner in the near term, as a firmer cash tone and improved demand prospects going into the late spring are bringing some buying optimism and positive money flow. A strong close into the end of the week could help lead the market higher after the Easter Holiday.
HOGS
The hog market is called to open mixed.
Hog futures saw selling pressure, to finish with moderate losses as prices consolidated at the top of the most recent move higher. A concerned for cash markets keep buyers on the sidelines, despite a firmer retail tone. June hogs traded near the top of Wednesday’s range, supported by the 40-day moving average. The market was likely influenced by the expiration of April future and options on Thursday. If the upward momentum can continue, prices will be looking to test the price gap on the Jun chart at 120.225 from earlier this month. The cash market is still the largest concern in the short term. National Direct midday values showed no comparison to Wednesday due to “Confidentiality” on price yesterday, but the weight average price was 96.47 and the 5-day average dropped lower to 98.07, reflecting the trend. The Lean Hog Index was lower, losing 0.53 to 99.10. The deferred futures premium over the index, is concerning and could be a limiting factor, especially with April expiration on Thursday. Pork carcasses showed strong midday trade, helping limit price pressure. Pork carcasses were 5.28 higher, and held some of those gains, closing 1.73 higher to 108.53 on a load count of 256 loads. The firm afternoon should help support hog prices on the Thursday open. The USDA will release weekly export sales today and those totals could help influence price direction.
Daily hog slaughter is estimated at 478,000 head, up 27,000 head from last week, and equal last year. The hog market numbers are still expected to tighten, and the rate of slaughter may be our first indicator of supplies tightening. Unfortunately, with the premium in the futures market to cash markets, that tighter supply may already be figured in. The hog market has showed some overall strength in the recent move higher but will need to see a stronger tone in the cash market or retail values to lead.
Author
Scott Masters