TFM Sunrise Update 06-23-2022


Corn futures traded lower overnight along with the rest of the grain and oilseed complex as more technical selling overtakes this year’s strong price trends.  July corn fell 15-1/2 cents to an overnight low of 7.52-1/2.  Dec dropped 23-3/4 cents to 6.70.  On Wednesday, Managed funds bought 3,000 corn, and they were net long an estimated 280,000 contracts heading into last night’s sell-off.  U.S. Midwest temps have or will moderate leaving few money managers willing to either continue to be long or become new buyers.  Weekly Export Sales, normally released on Thursday mornings will be out tomorrow, delayed one day due the markets being closed for holiday on Monday this week.  U.S. stocks are mixed.  The dollar is higher.  Crude is lower on new recession concerns.  Gold, silver, copper, coffee, sugar and cotton are lower.


Soybean futures were down overnight with July beans losing as much as 42-1/4 cents to 16.10-1/2.  Nov beans lost 44-3/4 cents to 14.31-3/4.  July meal was down 7.60 per ton to 4.23,80; And, July soy oil shed 1.61 to 69.05 before recovering some of those losses.  Strong seasonals suggest that grain and oilseed markets top late in June.  On Wednesday, Managed funds were net sellers of 13,000 soybeans and 8,000 soy oil, and buyers of 1,000 soymeal.  They are now estimated, as of last night, to be net long 143,000 soybeans, 55,000 soymeal and 54,000 soy oil.  China’s soymeal values are down 6% following the steepest drop in 10 years.  Soy oil continues to fall and is following steep losses in palm oil.

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Wheat futures remained in a volatile state overnight, resuming the near-term down trend.  Sept Chicago wheat made a new low for the move while losing 27 cents to 9.60-3/4, continuing its descent from 12.85 on hopes of increased exporter supplies and slow importer buying due to a drop in economies and ability to buy needed basic food for import.  Demand worries are compounded by a slow increase in U.S. export demand despite declining competitors’ supply.  Sept KC wheat plummeted 31-1/4 cents to 10.14-1/2.  Sept MPLS futures were dragged down 28-3/4 cents to an overnight and 2-1/2 month low of 10.78.  The spring wheat contract has now retreated below it’s 100-day Moving Average for the first time since early February.


Cattle futures are called mixed to lower following pressured trade on Wednesday as a steady cash market and overall weakness in the commodity sector weighs on cattle prices.  Technical resistance holds the market in check, and the discount of the futures market to the cash market is a unique twist going into June expiration on the 30th.   A light trade developed in parts of the South at $138, roughly steady to $2 lower than last week’s weighted averages.  A few other bids were noted, but those were mostly steady with last week.  At midday, beef carcass cutout values were softer, and held those values into the close, with choice values losing .99 to 266.57 and Select was .71 lower to 245.99.  The load count was moderate at 157 loads.  The cash market in feeders has been supportive.  The Feeder Cash Index was firmer, gaining .18 to 165.21.  The cattle market maybe starting to look at the June Cattle on Feed Report to be released after the market close tomorrow.  Expectations for the report are total cattle on feed at 102%, placements at 100%, and marketed 103% of last year.  The market will be closely watching the placement numbers to gauge the cattle crop going into the end of the year and 2023.


Hog futures are called steady to lower.  The trend for the past two weeks has been higher and the trend of increasing cash strength and cutout values should continue to support the market overall.  However, a weak commodity market tone and failure of hog futures to push through overhead resistance triggered some profit-taking on Wednesday.  July hogs were unable to get above the 100-day moving average which has been acting as resistance, but have maintained their level above the 50-day.  The midday pork cutout values were firmer, gaining 2.08 but closed off those gains, adding 0.29 at Wednesday’s close to 111.15 on demand of 258 loads.  Direct cash hog trade was firmer at midday, gaining 2.52 to a average of 117.33, and the rolling 5-day average of 115.88.  The CME lean hog index was 1.29 higher to 110.45, reflecting the cash market tone.


Matt Strelow

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