TFM Sunrise Update 06-13-2022


Corn futures were steady overnight.  The U.S. Midwest two-week weather outlook features some showers in next few days, hot and dry the rest of week.  A ridge moves east then back west next weekend and could bring scattered showers for the upper Midwest. This morning, there is plenty of scattered shower activity in the upper Midwest.  Overnight July corn peaked at 7.82-1/4 before settling back to unchanged territory.  the nearby corn bounced off recent lows and tested both the 20-day and 50-day Moving Averages and traded above the down trend line from the late April high.  Dec is trading near 7.20.  U.S. stocks are again sharply lower as higher U.S. inflation data continues to weigh on U.S. equities and rally the U.S. dollar. The Fed meets this week with a 50 basis point rate hike expected.  A 75 basis point rate hike cannot be ruled out.  Weekly Export Inspections will be out later this morning.


Nearby soybean futures are 20 cents lower this morning with the July contract at 17.25-1/2 and Nov at 15.44-3/4, down 23-1/2 cents amid lower equities and a strong dollar weighing on the bean complex to start the week.  Talk of China taking over Taiwan is also noted.  July soybean meal lost 6.0 to 423.10.  Nearby soy oil fell 1.25 to 79.56 while facing pressure from market rhetoric surrounding Indonesia palm oil exports.  Last night, Dalian soy prices were lower.  On Friday, Managed funds sold 13,000 soybeans and 6,000 soy oil and bought 2,000 soymeal leaving them net long an estimated 172,000 soybeans, 48,000 soymeal and 77,000 soy oil.

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Winter wheat futures were mixed last night and are firm this morning.  July Chicago wheat is up 8-1/4 cents to 10.79.  July KC wheat is up 9 cents to 11.71-1/2.  July MPLS futures are up 10-1/2 to 12.32.  U.S. HRW harvest is underway.  Most look for a lower U.S. HRW crop than the USDA June guess.  U.S. 2022 HRS acres and crop production should be below average.  USDA’s increase in Russia wheat exports translate to ideas that U.S weekly exports should remain low.  However, the war in Ukraine continues with heavy losses for both sides and Ukrainian ports remain mined. Reports that Putin likens himself to “Peter the Great” suggests he is not just looking to take over Ukraine but other ex-Soviet Union countries including some in the EU.


Cattle futures are called mixed to lower as profit taking as U.S. inflation data weighs on commodity and equity markets, bringing fears of potential demand concerns for beef into cattle markets.  There was moderate to active fed cattle cash trade in the North last week in a range of $140 to $144 live and $223 to $230 dressed, with most trading at $142 and $226, respectively.  That is mostly $2 to $4 firmer compared to the previous week.  Light to moderate volumes traded in the South at mostly $136 to $137 live – $1 to $2 firmer.  The Choice cutout continued higher, increasing $4.45, while the Select was nearly flat, moving $0.02 lower.  With demand slowing down following Father’s Day purchases and large supply being produced, prices have risk to move lower after this week.  Consumer inflation data was strong Friday morning, and the increased inflation picture likely weighed on cattle prices as the tighter consumer budget will likely be a limit factor in beef demand.


Hog futures are called steady to higher.   Hog futures saw some price recovery as futures finished higher to end the week as the strong cash market has moved to a premium over top the futures during the week.   Futures are pricing in the potential peak in the cash market.  The lean hog index trended to a premium to the futures market, reflecting the trend in cash.  On Friday, the Cash Index slipped .17, but was still 2.28 higher on the week.  Direct cash hog trade trended higher throughout the week, but Friday morning trade was 2.62 lower to 115.32, but the 5-day average increased to 115.94.  The retail market was firmer at midday, gaining 2.50, but pork values faded, closing .07 higher to 109.16.  The load count was light at 253 loads. For the week, pork carcasses were trading $1.00 higher than Monday’s close, and over $4.50 higher than Wednesday.


Matt Strelow

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