TFM Sunrise Update 05-24-2022


Corn futures were narrowly mixed and rangebound overnight.  July corn is fractionally lower to 7.85-1/2, and Dec is down 3-1/4 cents to 7.35-3/4.  Weekly Crop Progress from USDA showed 72% of the U.S. crop planted, up from 49% last week, and behind the 5-year average of 79%.  39% of the crop was emerged versus the 5-yr average of 51%.   A NASS Survey Update press release states: In the first two weeks of June, NASS will gather information about this season’s crop production, supplies of grain in storage, and livestock inventory. The information will help producers, suppliers, traders, buyers and others make informed business decisions. The results will be available on June 29 in the Hogs and Pigs report and on June 30 in the Acreage and Grain Stocks reports.  Farmers should watch for their surveys and be sure to respond. Your information matters!  In outside markets, The  dollar, crude and stocks are weaker.  Gold, silver and sugar are higher.  Copper, coffee and cocoa are lower.


Soybeans were two-sided overnight and are trading session highs this morning.  July beans are up 4 cents to 16.91.  New crop November futures are up 2 to 15.21.  July meal is up 2.90 to 425.40.  July soy oil is up .73 to 81.20.  50% of the U.S. bean crop is planted compared to 30% last week.  The weekly update was ahead of the average analyst estimate of 49% but behind the five-year average of 55%.  Emergence is at 21% versus the 5-yr average of 26%.  U.S. Midwest, north plains and Canada will see rains this week.  This could slow final plantings but will add beneficial moisture to U.S. Midwest soils.  Rains will also fall across U.S. south Plains.  Elsewhere, the EU is dry. Argentina could see some rain.  Australia rains is slowing fieldwork.  Overnight, Chinese September soybean futures were up 46 yuan; Soymeal down 82; Soy oil up 22; Palm oil up 118; Corn down 24;  Malaysian palm oil prices overnight were up 254 ringgit (+4.06%) at 6515.

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Wheat futures were up again overnight after reversing higher yesterday.  July Chicago SRW wheat is up 14 cents this morning and back above 12.00 to 12.04.  July KC HRW futures are up 11 to 12.87-1/2.  USDA rated the U.S. winter wheat crop at 28% Good-to-Excellent versus 27% last week and 47% last year.  KS is 25%, OK is 10%, MO 69%.  Despite the improvement, ratings are still among the lowest on record for this time of year. Winter wheat good-to-excellent ratings have been below 30% for the 20th week of the calendar year only three other times in USDA records dating to the late 1980s – in 2014, 1996 and 1989.  July MPLS Spring wheat gained 20 cents last night to 13.18-1/2.  U.S. spring wheat planting is advancing at the slowest pace in more than 20 years and was only 49% complete as of Sunday.  The average for the date is 83%.  Minnesota is only 11% planted vs 90% avg.  North Dakota 27% vs 80% avg.  Those two states grow two-thirds of the U.S. crop.  Elsewhere, EU dropped their wheat crop rating for the 2nd straight week due to dryness.


Cattle futures are called steady to higher.  The cattle market is not out of the woods, but the price action to start the week was very friendly.  The positive reaction to a neutral to negative Cattle on Feed report can sometimes be a key for prices to turn a corner, but one day doesn’t mean a turn.  The key will be money flow, the cash market, and potential follow through trade higher over the next few sessions.   June cattle pushed back above the 10-day moving average and is set up for additional technical buying and short covering going into today’s session.  The May cattle on Feed report continued to show overall heavy supplies of available cattle, and a larger than expected placement totals, but seasonality may be in play as prices could be looking to build a seasonal low.  There was talk of some regional cash trade at $138, which would be steady with last week, which helped support June futures.  The market will be targeting steady trade, but most business will hold off until the end of the week.  USDA announced the Cold storage report after the market closed and Total pounds of beef in freezers were down 1% from the previous month but up 18% from last year.  The tighter month-over-month stockpiles is likely reflecting good overall demand and carcass weight trending lighter.  The premium of front month feeder contracts to the Feeder Cash Index is still concerning, with August trading at nearly a $13 premium to the index. Feeder Cash Index was .33 lower to 152.72.  The May Feeder contract expires Thursday.


The hog market is called steady to firmer.  The market finished higher Monday as the buying strength continues supported by strong cash markets and improving retail markets resulting in triple digit gains to start the week.  June hogs traded higher for the 6th time in 7 days and prices closed back above the $110.000 level.  The June market is testing the 100-day moving average at $110.600, which could be a key barrier of resistance.  If price could push through, the 50-day moving average is at $113.500 would be the next target.  Midday cash markets were unreported due to “confidentiality” on Monday, but the 5-day average moved higher to 109.06.  CME Lean Hog Index started to reflect the higher trend gained .80 to 101.17.   Hog weights have begun to soften, but there are still ample hogs available with estimated slaughter at 473,000 head on Monday, 3,000 more than last week.  USDA cold storage data on Monday reflected a slower demand pace and those larger numbers as frozen pork supplies were up 9% from the previous month and up 16% from last year.  Stocks of pork bellies were up 3% from last month and up 67% from last year.   Retail values trended higher last week on good product movement, helping support prices overall.  Midday carcass values were .71 higher but prices faded into the close, losing .06 to 107.05. Movement was light at 271 loads.  The CME Pork Cutout Index worked higher and reflecting the recent strength.  On Monday, the index gained .96 to 103.22.   The question is now, how high can this market climb on this recovery?


Matt Strelow

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