TFM Sunrise Update 06-21-2022


Corn futures were down overnight, gapping lower while posting double-digit losses and slipping past 50-day Moving Average support as U.S. weather offers resistance.  Nearby July corn fell 15-1/4 cents to 7.69-1/4.  Dec was down as much as 19-3/4 cents to 7.11-1/4.  The U.S. Midwest 7-day outlook is dry, but temperatures are seen closer to normal through June 30.  Domestic basis remains firm as end users continue to try to add to inventory at a time U.S. farmers are unwilling sellers.  The key is the Impact dry weather will have on final yields and if funds buy corn against strong seasonal tendencies for corn prices to make tops in late June and early July.  The best U.S. corn crops are in likely in IA, WI, KY and IL with the worst in MN, ND and NE.  Weekly Crop Ratings will come out after the close today.  In outside markets,  U.S. stocks are higher.  The dollar is lower.  Crude, silver, copper, coffee, cocoa and sugar are higher.


Soybean futures slid lower overnight with July beans falling as much as 25 cents to 16.77 versus the contract’s 50-day Moving Average at 16.81 before trimming losses.  Nov beans hit 15.06 after dropping 31-/12. cents.  July meal was down 2.60 to 435.50.  July soy oil fell 1.37 to 72.42.  Slower Chinese demand for soybean and soy oil and lower Dalian soybean, soymeal, palm oil and soy oil futures is limiting new spec buying.  Brazil was a big seller of soybeans last week making room for the 2nd corn crop.  This weighed on Brazil soybean prices especially with slower than normal China buying. The south one third of the U.S. will be hot and dry until June 26 which could stress U.S. Delta soybean crops that will be needed for early soybean vessel loading.  Arguably, the best U.S. soybean crops are in IA, AR, KY and LA with the worst in MN, ND, OH and MO.

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Wheat futures traded lower overnight.  Sept Chicago wheat plunged to an overnight low of 10.16-1/4 on losses of 30-1/2 cents while testing 100-day Moving Average support.  Sept KC wheat traded an overnight low of 10.88 while losing 24 cents.  Sept MPLS Spring wheat fell 20 cents to 11. 50.  Paris wheat futures are lower.  Unfounded talk of higher Ukrainian and Russian wheat exports amid reluctant World buyers near term in hopes for lower prices a better supply outlook is weighing on market sentiment.  In addition, U.S. and Canada HRS weather is improving.  World demand is forecast to exceed supply.


Cattle futures are called  mixed to higher after the cash market pushed the live cattle futures higher.  The influence of weather and outside markets will likely be big parts of the puzzle for prices this week.  The cattle market was very resilient again on Friday despite weakness in crude oil, and equity markets.  Most of the session on Friday, grain prices were stronger, so the performance by the cattle complex was impressive with those headwinds over top.  There was active fed cattle cash trade in the North at mostly $145 to $149/cwt live and $230 to $232 dressed.  That is mostly $4 firmer compared to the previous week.  Light to moderate volumes traded in the South at mostly $138 to $140 live – $2 to $3 firmer.  The Choice cutout declined $4.88/cwt this week, while the Select moved $4.05 lower. Higher production and a slower demand period through the second half of summer has buyers less aggressive in purchasing product near term.  Feeder cattle rebounded nicely off Thursday’s selling pressure with triple digit gains.  The strong cash market tone and rising Feeder Cash Index values helping support the feeder market.  Cattle numbers are still trending lower, and the Feeder Cash Index was firmer, gaining 1.61 to 162.17. Talk of a strong countryside cash market for feeders is helping support the overall feeder market.  Weak grain markets on the overnight session will likely be supportive of the feeder market is the lack of grain strength continues.


Hog futures are called steady to higher.  The July contract is leading this market higher, and with the strong technical close last week, follow through buying will be a possibility to start the new week.  Hog retail carcasses closed softer on Friday, losing 2.74 to 111.87.  Despite the weak close on Friday, demand was supportive as hog carcass values trended firmer overall on the week.  Midday direct cash hog trade was softer on Friday, losing .40 to 114.94, but prices were firmer during the week, supporting the front end of the market.  The CME Lean hog index gained 1.44 on the week reflecting the stronger cash tone.  High heat across the corn belt early in the week will help support the hog market as packers stay aggressive in the cash market to encourage hog movement.  Hot temperatures can effect hog weights and gain as well.


Matt Strelow

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