TFM Sunrise Update 05-27-2022

The CME and Total Farm Marketing offices will be closed Monday, May 30, 2022, in observance of Memorial Day


Corn futures were mixed overnight in a relatively narrow trading range of 8-1/2 cents (July).  The nearby contract is up 2 this morning to 7.67.  Dec is up 3 to 7.21-3/4.  For the week, the contracts are down 28 and 27 cents, respectively, while finding some support at their 50-day Moving Averages.  Year-To-Date nearby corn futures are up 29%.  On Thursday, Managed funds were net sellers 25,000 corn contracts on talk that a large hedge fund liquidated a large long (2) corn, (1) short soybean position.  At one point they were liquidating 2,000 contract every few minutes.  Strong corn planting is also seen weighing on sentiment.  Managed Money is now estimated to be net long 269,000 corn contracts heading in to the 3-day weekend and end of the month.  U.S. stocks are firm, the dollar is flat/weaker.  Crude is down .80/bbl.  Gold, silver, copper, sugar and cotton are higher.


Soybeans traded two-sided overnight.  July beans are up 3 to 17.29-1/2 and up 24 cents on the week.  Nov beans are down 2-3/4 cents to 17.29-1/4 and up 7-1/2 cents this week.  July meal is unchanged at 428.20.  Soy oil is down .37 to 80.15.  Year-To-Date nearby soybeans are up 30%; Soymeal up 4%; Soy oil up 42%.  On Thursday, Managed funds bought 17,000 soybeans, 3,000 soymeal and 5,000 soy oil.  They are now estimated to be net long 150,000 soybeans, 40,000 soymeal and 85,000 soy oil.  Chinese Sept soybean futures were down 8 yuan; Soymeal up 92; Soy oil up 166; Palm oil up 330; Corn up 7;  Malaysian palm oil prices overnight were down 176 ringgit (-2.69%) at 6357.

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Wheat futures traded two-sided overnight and are in positive territory this morning.  July Chicago wheat is up 8 to 11.51-1/4.  For the week, the contract is down 17-1/2 cents.  July KC wheat is up 1-1/2 cents to 12.30 and down 22-3/4 cents for the week.  July MPLS wheat is up 9 to 13.01-1/4, down 22-1/4 cents this week.  On Thursday, Managed funds were net sellers of 3,000 Chicago wheat and are estimated to be net short 8,000 SRW contracts.  Wheat is slightly higher and off Thursdays lows with ideas that Putin would contribute to solving World food crisis if sanctions against Russia are lifted. Some estimate that there are 70 vessels in Ukraine that either need export or need to be loaded.


Cattle futures are called mixed.  Live cattle futures look choppy into the 3-day holiday weekend.  Jun cattle futures prices have fallen into a trading range with the 20-day moving average on top and the 10-day moving average on the bottom, holding that level in Thursday’s trade.  The contract posted a bearish reversal on Wednesday, but prices consolidated at the bottom of yesterday’s range on Thursday.  Cash trade was light on Thursday with the bulk of the action likely wrapped up for the week.  Southern trade was mostly posted at $137, down $1 from last week’s totals and Northern trade hitting $140, with regional reports of strong overall trade values.  Retail beef prices had a softer close on Wednesday, but were firm at midday Thursday and held most of those gains into the close, with Choice gaining 1.04 to 263.97 and Select was .37 higher to 244.33.  The load count was light at 134 loads.  Thursday’s estimated cattle slaughter is 124,000 head, down 1,000 head from last week, but up 3,000 from last year.  Maybe more importantly, beef carcass weights are softening, with weight for the week ending May 14, steer weights down 7 pounds to 891 pounds which is 3 pounds below last year.  Lighter weight will help tighten the beef production totals.   The May feeder contract expired yesterday with a final trade of 154.575.  August is the new lead month and the premium to the cash index is concerning.  The Feeder Cash Index was 0.45 higher to 153.80, but trading at nearly a $13.00 discount to the August futures.


The hog market is called steady to higher following triple digit gains on Thursday as a strong cash tone and retail demand continue to support the market.  June futures features strong price action, trading outside yesterday’s range, but failing to push through the 100-day moving average resistance over the top the market. This was the third test of this barrier in the past four sessions.  The strong close, and the supportive fundamental may lead to a push higher through this point on Friday.  The midday cash market has trended higher ,but saw softer tone at midday.  Midday direct trade was .62 lower with the weighted average at 111.34 on Wednesday, and the 5-day average moved higher to 111.79. The CME Lean Hog Index is reflecting the higher cash tone gained 0.84 to 103.87.  On Thursday, estimated slaughter was at 475,000 head, up 2,000 from last week, but 8,000 head below the year-ago level. The market is closely watching the trend in hog slaughter numbers.  Retail values trended higher at midday with carcass values 1.82 higher, and held most of those gains into the close finishing 1.06 higher to 108.13.  Movement was light at 233 loads. The CME Pork Cutout Index added .75 to 106.72 reflecting the recent strength.  The rally is taking a pause, but trying to push to another level, but the 100-day moving average is a strong barrier.  Market fundamentals are staying favorable and may be enough to move prices higher for the next leg.


Matt Strelow

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