CORN
Corn futures were down overnight on seasonal planting season pressure and outside market movement to start the week. July and Dec corn was down 12-1/2 cents to 7.72-1/4 and 7.08-1/4, respectively. The dollar is up 25 basis points to a new high, crude is down $2.00 per barrel and stock index futures are down 400 points. We’ll get a Weekly Planting Progress update this afternoon. Some see 50% of U.S. corn crop being planted by May 20 and the remaining acres by June 1. Weekly Export Inspections will come out mid-morning today. The May WASDE report will be on Thursday at 11:00 AM Central time. After Friday, Managed Money had shrunk their net long position to an estimated 343,000 contracts. Basis bids for corn shipped by barge to the U.S. Gulf Coast were roughly steady on Friday and soybean barge bids had a firm tone, supported by slower movement of grain from the country as farmers scrambled to plant their 2022 crops where weather allowed.
SOYBEANS
The soybean complex traded lower overnight. July beans fell 15 cents to 16.07. Nov was down 12 to 14.58-1/4. July meal shed 5.20 to 408.40, and July soy oil slipped .21 to 80.69. Chinese Sept bean futures were up 2 yuan; Soymeal down 100; Soy oil down 104; Palm oil down 192; Corn down 13; Malaysian palm oil prices overnight were up 10 ringgit (+0.16%) at 6410. On Friday, Managed funds sold 12,000 soybeans, 2,000 soymeal and 3,000 soy oil and were estimated to be log 161,000 soybeans, 63,000 soymeal and 86,000 soy oil. The steep drop in World equity markets combined with new highs in the U.S. dollar continues to weigh on futures. U.S. soybean plantings are estimated near 14 to 18% complete ahead of this afternoon’s weekly USDA update. Looking ahead to Thursday, trade estimates for U.S. 2021/22 soybean carryout is near 225 mil bu vs the previous 260 and 2022/23 U.S. soybean carryout near 317.
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WHEAT
Winter wheat futures were up overnight as prices trend higher, particularly in spring wheat. July Chicago gained as much as 26-1/2 cents to get back to the top of it’s 2-month trading range 11.35 before trimming gains this morning. On Friday, Managed funds were net buyers of 1,000 Chicago wheat and were estimated to be long 41,000 contracts. July KC hit 12.00 on gains of 29-1/2 cents last night. July MPLS spring wheat made a new contract high at 12.34-1/2 on a gain of 25 cents. Futures are higher on lingering support from ideas that India may not have additional wheat for sale. In addition, Pakistan and Bangladesh remain dry, and drier EU and U.S. HRW weather along with a wet northern U.S. and Canadian weather pattern add to concerns over a Black Sea wheat export pace. Trade estimates US 2021/22 wheat carryout on Thursday is near 686 mil bu vs 678 previously and U.S. 2022/23 carryout near 659.
CATTLE
Cattle futures are called mixed. Futures finished .275 to 1.025 lower to end the week. June Live cattle have struggled in the second half of the week after failing at resistance at the 200-day moving average, and with the soft price action on the week, look vulnerable to additional downside pressure this week. Friday’s low of $132.500, will be a key support level for nearby June live cattle. There was active fed cattle cash trade in the North last week at $144 to $148 live, and $228 to $234 dressed. That is steady compared to the previous week. Moderate to large volumes were traded in the South at mostly $140 live, which was steady with the previous week. The Choice cutout moved $7.42 lower last week, while Select decreased by $5.25/cwt. Seasonally, boxed beef should see a rally with the approach of Memorial day and grilling season meaning increased demand. Friday’s slaughter totaled 121,000 head, 3,000 more than last week, and 10,000 greater than a year ago. The heavier slaughter tone still indicates the market has plenty of cattle to work through in the near-term. The feeder market was supported by a weak tone in the grain markets on Friday. May feeders were pressured by the premium over the Feeder index, which gained .01 today to 155.60, but trading nearly to a $4.00 discount under the May futures. Despite some end of the week selling pressure, Feeder cattle charts used the corn market weakness to post good weekly gains, but the action of the grain markets will stay as a trigger for buying or selling in the feeder market.
HOGS
The hog market is called steady to low as sellers step back into the market. The 200-day moving average for June hogs still acts as key support, and may be tested again this week. The May contract is still tied to the cash index, and prices recovered back above the index during the week last week. The index traded .08 lower on Friday to 100.96 and is holding a small discount to the futures. For the week, the lean hogs index was .85 lower overall. The cash market still looks to be an issue, limiting the front end of the market. Retail carcasses closed softer on Friday, slipping 1.57 to 104.70 on demand of 289 loads. Carcass values, in general, have been choppy trending slightly lower on the week, losing nearly $2.00 from Monday’s close. The weak afternoon close will be limiting for price direction going into today. Large hog numbers and heavier hog weights has been a limiting factor in the current hog market. Finding a low is a process, and the price action to end the week has summer hogs pointing to a retest of that potential low next week. The fundamentals just aren’t there to provide the overall support as prices consolidated last week.
Author
Matt Strelow