TFM Sunrise Update 05-19-2022


Corn futures were down last night with nearby July off a nickel to 7.76-1/2 and Dec down 11 to 7.29-1/4 on long liquidation as the market may be attempting to correct from a technically overbought condition. Trade estimates for this morning’s USDA Weekly Export Sales are 150,000 to 450,000 tons for old crop, 500,000 to 900,000 tons for new crop.  Matif corn futures are lower, but dry EU weather is offering support.  There remains rumors that the UN is asking Russia to allow Ukraine grain exports.  Outside markets are seen weighing on corn as well as a further erosion in the wheat market.  Stock index futures are making new lows, crude is down 1.50/bbl.  The greenback is lower.  Gold and copper are higher.  Silver, coffee, cocoa, sugar and cotton are lower.


The soybean complex was mixed to lower overnight.  July beans are down 1-1/2 cents this morning to 16.61-3/4.  November is down 11-1/2 cents to 14.88.  July meal is up .80 to 414.80.  July soy oil is down 1.08 to 79.47.  Trade estimates for this morning’s USDA Weekly Export bean Sales are 150,000 to 500,000 tons for old crop, 50,000 to 600,000 tons for new crop; Soymeal – 100,000 to 350,000 tons for old crop and zero to 50,000 tons for new crop; And, for soy oil, zero to 20,000 tons for old, nothing for new crop.  Futures being near season highs could slow nearby sales.  Higher July soybean futures has dropped board crush margins to near Feb lows.  U.S. cash crush margins remain firm.  The trade’s sights are set on the planting pace which is expected to make strides toward catching up, except possibly in ND and N MN where wet conditions prevail in some areas.

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Wheat futures were lower overnight.  July Chicago wheat traded as much 29-1/4 cents lower to 12.01-1/4 before trimming losses to 14 cents.  July KC is down 20 cents to 14.04-1/2.  The winter wheat contracts are poised to complete mending the gaps left on the charts from the start of the this week’s trading when prices jumped up to new contract highs.  July MPLS is down 14 cents to 13.38-3/4.  Trade estimates for this morning’s USDA Weekly Export Sales are (50,000) to 150,000 tons for old crop, 50,000 to 250,000 tons for new crop.  Wheat futures continues to chop lower following the washout in U.S. equities and many commodities.  Meanwhile, the U.S. annual HRW crop tour is reporting a yield 35% below last year.  The five state crop total could be close to 449 mil bu vs 663 last year.  USDA estimates the U.S. spring wheat crop near 533 mil bu vs 331 last year with North Dakota at 254 vs 174 and Montana – 112 vs 37.


Cattle futures are called steady to lower.  The U.S. consumer and disposable income due to price inflation weighs on the cattle market in general.  June live cattle posted their lowest daily close since October, as price action stayed weak, testing the most recent lows.  The low range close keeps the market very cautious and further selling pressure on Thursday is likely.  The impact of a strong selling pressure in the equity markets resulted in spill over selling into the cattle complex.  The tone in equites prices on Thursday will be a factor for the cattle market open.  The cash market saw additional light trade on Wednesday running steady with trade earlier in the week.  The cash market this week has seen southern deals were being established at $138, down $2 from last week’s levels.  Northern dress trade was at $226-$227, $2-3 lower than last week.  Retail beef at midday was mixed but closed softer with Choice losing .01 to 260.47 and Select was 2.17 lower to 246.02.  Load count was light at 136 loads.  Thursday will give a picture on global demand with weekly export sales announcements before the market open.  The USDA Cattle on Feed report will be out tomorrow afternoon, and that could keep the market choppy for the remainder on the week.  Analysts’ expectations for the report are showing total Cattle on Feed at 101.5% of last year, Placements at 96.5% of last year, and Marketings at 97.9% of last year.  Feeders saw modest losses, despite a weak trend in the grain markets on Wednesday.  The weaker tone in live cattle futures and the risk off trade in the markets in general weighed on feeder prices.  The premium of the front month contracts to the feeder cash index is still concerning, with August trading at a $10 premium to the index. Feeder cash index was .22 lower to 155.05.


The hog market is called steady to higher ahead of Weekly Exports and an improved cash market and retail tone that has provided the strength under a strongly oversold market.  June lean hog futures finished higher for the 4th consecutive day as buyers have pushed the contract back above the 10-day moving average and challenged the 20-day moving average on the close Wednesday.   Additional money flow may have the hog market looking to recover back to a possible test of the 100-day moving average at $110.00, with short-term resistance at the $107.000 level.   Midday carcass values were 3.07 higher and held some gains closing 1.50 higher to 103.61.  Movement was lighter at 287 loads.   At 105.00, this was the highest midday trade in over a week.  The CME pork cutout index has been trending lower, reflecting the recent weakness, but turned higher Wednesday, gaining .43 to 100.66.


Matt Strelow

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