TFM Sunrise Update 06-07-2022


Corn futures were down overnight with nearby July off 6 cents to 7.36-1/2 and Dec down 4-1/2 cents to 6.98.  The whole grain and oilseed complex weakened last night, correcting from a strong start to the week.  USDA Weekly Crop ratings came out Monday after the close.  The agency reported U.S. corn planting 94% complete versus the 5-year average of 92%.  There are 684,000 acres yet planted in ND, 546,000 in MN and 434,000 in SD.  78% of the U.S. crop is emerged vs the 81% average; And, 73% of the crop is rated Good-to-Excellent compared to the 5-yr average of 72% and 50% last year.  On Monday, Managed funds were net buyers of 13,000 corn, extending their long position to an estimated 256,000 contracts.


The soy complex was mixed overnight.  July beans are down 2-1/2 cents this morning to 16.96-3/4.  Nov beans are down 3/4 cent to 15.32-3/4.  July meal is down 1.50 to 405.60.  USDA Weekly Crop Progress pegged soybean planting at 78% complete vs the 5-yr average of 79%.  56% of the crop is emerged vs 59%.  On Monday, Managed funds were net even soybeans and sold 1,000 soymeal and 2,000 soy oil.  They are now estimated to be net long 175,000 soybeans, 45,000 soymeal and 71,000 soy oil.  There is talk that Biden may lift import tariffs against China.  Chinese Ag futures overnight showed Sept beans down 34 yuan; Soymeal down 37; Soy oil up 44; Palm oil up 36; Corn down 7.  Malaysian palm oil prices overnight were up 38 ringgit (+0.59%) at 6491.

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Wheat futures down overnight.  July Chicago and KC wheat lost 9 cents to 10.84 and 11.61, respectively.  Winter wheat conditions were 30% Good-to-Excellent, up 1 point from last week.  USDA estimated U.S. winter wheat harvest at 5% complete with Oklahoma and Texas running behind average.  Rains are seen slowing harvest and raising concern over the quality in Kansas.  On Monday, Managed funds were net buyers of 18,000 Chicago wheat shifting their net position to an estimated net long 5,000 contracts.  MPLS Spring Wheat futures were down 3 cents last night.  82% of the crop is planted compared to the 97% 5-year average.  55% of the crop is emerged vs 83% 5-yr.  Price volatility eased overnight as the trade digests Russia’s intentions in the ongoing war against Ukraine.


Cattle futures are called mixed to lower.  The market saw some profit taking as prices as struggling through overhead resistance, and a strong grain market weighed on the entire complex.  Cash trade was at a stand still to start the week. Trade is expected to stay mostly steady with last week.  Beef production was down 6.8% from last week, but up 10.6% from last year as slaughter numbers continue to run higher than last year.  Carcass weights keep sliding, losing another 4 pounds from last week, tightening the production numbers.  Retail beef carcasses finished the day higher with Choice carcasses gaining 2.32 to 269.58 and Select was 1.07 higher to 251.09 on moderate demand of 70 loads.  Feeder cattle were pressured by strong grain market as prices softened for the first time in four sessions.  Cattle markets showed some signs of topping on Monday’s session. It may take the cash market and demand tone to help push this market higher.


Hog futures are called steady to lower. The market experienced bear spreading yesterday with the front month testing support as the premium of the futures market to the cash market weighed on prices.  Summer hogs may be moving into a sideway trading range with $110 on top, and supported at 4107.  Direct cash hogs were softer at midday, losing 1.06 to 111.58, with the 5-day average at 112.39.  The CME lean hog index gained 1.02 to 106.05.  Pork retail values were higher at midday, gaining 6.88, but closed slightly lower, losing .59 on the day.  Product movement was good at 320 loads. The softer retail close may limit the open today.  Pork production last week was down 12.9% from the previous week as slaughter numbers were down nearly 300,000 head week over week due to the Memorial day holiday.  Packers should be active this week looking for additional hog supplies.  Overall, the hog market may have hit the top of this correction, and it will take strong fundamentals to help push it to another level.


Matthew Strelow

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