TFM Sunrise Update 06-14-2022


Corn futures were down overnight with nearby July off 8-1/2 cents to 7.60-3/4.  Dec was down 7 to 7.14-1/2.  USDA Weekly Crop Ratings, released yesterday afternoon showed planting progress at 97% complete.  88% of the crop is emerged and, Condition ratings were 72% Good-to-Excellent.  The U.S. Midwest will be hot and dry the rest of this of week.  Next week is now also expected to be warm and dry.  There is about 350,000 acres yet to be planted in ND where wet weather prevails yet again today.  The best crops are in IL, MI, KY, IA and WI.  The lowest rated are in KS, ND, MN and NE.  In outside markets, the dollar is maintaining strength, as well as crude.  Stock index futures are mixed.  Gold, silver, copper, cocoa, sugar and cotton are lower.  U.S. inflation is at a 40 year high.  The Fed will increase rates this week with economists calling for a 75 basis hike.


Nearby soybean futures were firm overnight.  July beans were up a nickel to 17.12-1/2.  Nov was up 2-1/2 to 15.36-1/4.  July meal was up 2.40 to 4.17.50.  July soy oil prices were down .11 to 19.40.  USDA Weekly Crop Ratings, released yesterday afternoon showed planting progress at 88% complete.  70% of the crop is emerged, a little behind the 74% 5-yr average, Condition ratings were 70% Good-to-Excellent.  The best crops are in AR, KY, IA and WI.  The lowest rated are in OH, ND, MN and MO.  Dalian soybean and soymeal futures were lower overnight, veg oils higher.  Other than weather, trade focus is dialed in on new China Covid lockdowns that may be slowing demand.

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Wheat futures traded lower overnight.  September Chicago wheat holds the most open interest for SRW futures and fell 15 cents to 10.71.  Sept KC (HRW) futures were down 13, to 11.56.  USDA rated
U.S. winter wheat crop 31% Good-to-Excellent versus 30% last week and 48 last year.  42% of the crop is rated poor-to-very poor vs 20% last year.  10% of the crop is harvested.  Sept MPLS Spring wheat futures were down 12 cents overnight to 10.09-3/4.  The USDA released its first crop condition ratings of the year for spring wheat, and rated 54% Good-to-Excellent vs 37% last year and 70% average with 94% of crop planted.  There is 700,000 unplanted spring wheat acres in ND and MN.  New highs in the dollar to start the week is helping put pressure on the markets.  World buyers are asking for India wheat but India is not selling. Buyers are also asking for Russia, especially after USDA raised Russia wheat exports to 40 mmt, but freight is difficult to find.  Matif wheat futures are higher due to dry EU weather and a 4 week low in the Euro.


Cattle futures are called mixed to lower after a difficult start to the week as the weakness seen at the of end the week last week spills over to this week.  Strong selling pressure in equity markets and demand concerns due to a tighter consumer dollar brought more selling pressure to cattle markets.  Cattle prices gapped lower, triggering a move through downside support levels.  Prices did find some buying support off the session lows, but the technical damage was done to the charts and will keep the pressure in the market going into today. The retail demand will stay in focus past the Father’s Day holiday.  Carcass values were weaker on the close to start the week at midday with Choice values down .78 to 270.54 and Select was 1.44 lower to 247.45. The load count was light at 93 loads.  Carcass weights dropped another 5 pounds last week, maintaining the trend and weekly production last week was 548 million pounds, still larger production compared to last week and last year as slaughter numbers remain strong despite the lighter weights.  Feeder cattle follow live cattle lower on profit taking and long liquidation.  The cash market will still take the spotlight but has yet to develop to start the week.


Hog futures are called steady to higher.  Front month hogs futures found some footing after early selling pressure as the June contract is looking at expiration today, and the cash market was holding a premium to the futures.  Direct cash hog trade trended higher throughout the week last week, but was softer on Monday morning, trading 2.50 lower to 112.82, but the 5-day average increased to 116.01. The lean hog index trended to a premium to the futures market last week, reflecting the trend in cash.  On Monday, the Cash Index slipped .12 to 107.19.  The retail market was firmer at midday, gaining 2.84 and held those gains into the close finishing 2.22 higher to 111.38.  The load count was moderate at 306 loads.


Matt Strelow

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