TFM Sunrise Update 06-17-2022

The CME and Total Farm Marketing offices will be closed Monday, June 20, 2022, in observance of Juneteenth Day


Corn futures were higher overnight on follow-through from Thursday’s rally.  July corn was up 9-1/2 cents to a fresh one-month high of 7.97-3/4 as the contract flirts with $8 amid higher domestic basis.  Matif corn futures are also at a 3 week high.  Dec corn rose 12-3/4 cents to 7.47-3/4.  For the week, the new crop contract is up 27 cents.  On Thursday, Managed funds were net buyers of 10,000 corn elevating their net long position to an estimated 282,000 contracts.  The next 4 to 6 weeks of U.S. Midwest weather will be key to yields.  NOAA’s forecast is warm and dry the next 10 days.  After that, EU model continues to be warm and dry into the first few days of July.  NOAA 30 and 90 day forecast is warm and dry.  Monday night’s U.S. 2 week forecast will be watched closely.  In South America, Argentina’s harvest is 37% complete with a crop estimate of 49 mmt vs USDA 53.   Brazil corn is looking closer to 107 mmt vs USDA 116.


Soybean futures were up overnight with July beans up as much as 15 cents to 17.24-1/2.  November beans gained 12-1/4 cents to 15.55-1/2.  For the week, Nov beans are down 13 cents.  July meal is up 2.70 to 423.40 and down 6.30 per ton for the week, but are trading above the 50 day Moving average for first time since early April.  July soy oil is up .16 to 76.50  and down 4.31 for the week.  On Thursday, Managed funds were net buyers of 8,000 soybeans and 5,000 soymeal and sold 4,000 soy oil.  They are now estimated to be net long 159,000 soybeans, 49,000 soymeal and 66,000 soy oil.  US soybean export commits are down 2% from last year vs USDA ‘s 4% drop.  Final U.S. bean exports could be 50 mil bu higher than USDA which would drop U.S. 2021/22 carryout below 200 mil bu.  Soy oil futures are at a 2 month low.   Domestic U.S. soymeal basis continues to push higher.  Argentina soybean harvest is done with most estimating the crop size at 43 mmt vs 46 last year.

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Wheat futures were narrowly mixed overnight.  Sept Chicago wheat is up a penny this morning to 10.91-1/2.  For the week, the contract is off 7 cents.  On Thursday, Managed funds were net buyers of 10,000 Chicago wheat and are now estimated to be net long 18,000 contracts.  There is talk Indonesia may be looking for July U.S. SRW.  Sept KC wheat is trading 1-1/2 lower to 11.54-1/4 this morning to 11.47-3/4.  For the week, the contract is 15 cents.  Sept MPLS is fractionally lower to 12.09, down 12 cents on the week.  China rejected a request to export excess supplies to help World wheat supply shortages.  The lack of Black Sea export logistics offers market support.  Importers are still trying to defer demand and buy hand to mouth.  Global weather and trade restrictions limits should limit price declines.  Canada and U.S. HRS weather is improving. the EU and Black Sea weather is also dry, but main focus is Ukraine exports or lack there-of.


Cattle futures are called steady to lower.  On Thursday, the most actively traded Aug contract failed to push higher, but held on to most of Wednesday’s gains.  Prices did fade back under the 100-day moving average, which has acted as a swing point on the Aug chart.  The Cattle market is juggling different influences, and the overall mixed tone on Thursday could be considered a positive.  Strong selling pressure in equity markets, demand concerns were be counter-acted by weather forecasts and strong cash.  Patience has paid off this week in the cash market as more southern trade was completed at $140 and Northern trade at $145-148 on Thursday, which was $1-4 higher than trade earlier in the week.  The cash market has been supported by the forecasts for hot weather, and the drop in carcass weights.  Packers have been forced to bid up to secure supplies.   The retail demand will be watched after the Father’s Day retail buying is complete.  At midday, cutout values were softer at the close with Choice values slipping 1.06 to 267.16 and Select was .30 lower to 245.38. The load count was moderate at 128 loads.  Weekly exports sales on Thursday reported new net sales of 17,400 MT for 2022 were down 2% from the previous week and 12% from the prior 4-week average. Japan, China, and South Korea were top buyers of U.S. beef last week.  Feeder cattle struggle with the strong move higher in the grain markets triggering some profit taking.  Cattle numbers are still trending lower, and the Feeder cash index was firmer, gaining .48 to 160.56.


Hog futures are called steady to higher.  Hog futures closed higher on Thursday after a jump in cash market and the premium over the July futures ushered in more buying.  Good pork export sales and retail demand were supportive the market.  Pork net sales for 2022 were 26,700 mt, up 65% from last week, and up 1% from the prior 4-week average.  The three largest buyers were Mexico, China, and Japan.  The front end of the hog market is looking to add premium given the strength in cash trade.  This has triggered bull spreading in the hog complex the past couple sessions.  Hot temperature forecasts are supporting the market as the market adds premium and packers are willing to pay higher for cash trade to encourage producers to move hogs in the heat.  Retail pork carcass prices were 4.04 higher at midday, and closed up 5.57 to 111.36 on light movement of 207 loads.  The firm retail close should support the open today.  The National Direct midday report had cash .21 higher with the weighted average at 116.85.  CME lean hog index traded .44 higher to 108.57.


Matt Strelow

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