The CME and Total Farm Marketing offices will be closed Monday, July 4, 2022, in observance of Independence Day
CORN
Corn futures traded two-sided overnight with follow-through downward movement in December corn noted before prices rose slightly. The new crop contract slumped below 200-day moving average support where a technical bounce ensued. The contract was up as much as 7-1/4 cents to 6.27. September corn did much of the same and was up as much 8 cents to 6.36-3/4. For the week, both contracts are down about 45 cents. On (USDA report) Thursday, Managed funds were net sellers of 18,000 corn contracts, shrinking their net long position to an estimated 222,000 contracts. The NOAA 30 day forecast is warm and dry, but bullish traders may be gone from the market until U.S. July and August weather actually turns warm and dry. The U.S. Midwest forecast holds rain for next week. U.S. stocks are weaker this morning. The dollar is higher. Crude is higher. Gold, silver, copper, cocoa, sugar and cotton are lower. Coffee is higher. Fears of inflation and recession slowing consumer spending is sending commodity and metal prices lower.
SOYBEANS
Soybean futures were mixed overnight with a weaker theme going into this morning. Nearby July beans are down 21 cents morning to 16.54, about mid-range of $2.00 range from the contract high (17.84) and recent low (15.82). August is down 6 cents to 15.54-1/2, and Nov is down 9 to 14.49. For the week, November beans are up 25 cents. On Thursday, Managed funds were net sellers 1,000 soybeans and 5,000 soy oil and bought 1,000 soymeal. July meal is down 4.90 to 4.65. Soy oil is down .30 to 69.63 July). Managed Money is estimated to be net long 153,000 soybeans, 74,000 soymeal and 33,000 soy oil.
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WHEAT
Winter futures were mixed overnight with a firm tone this morning as prices recover from Thursday’s down day, or at least try to. Sept Chicago futures made a new low for the move below 200-day Moving Average support to 8.70-3/4, pushing the contract to a loss of 66 cents for the week. The contract is trading 6 cents higher this morning at 8.90. On Thursday, Managed funds were net sellers of 11,000 Chicago wheat and are now estimated to be be net short 7,000 contracts. Sept KC wheat hit 9.41-1/4 last night, completing a price drop of 57 cents for the week before trimming losses and gaining 3-3/4 cents to 9.55-1/2 by this morning. Sept MPLS wheat is up 4-1/2 cents this morning vs last night’s new low for the move to 9.88. This morning’s trade is right at the contract’s 200-day MA at 9.94-1/4.
CATTLE
Cattle futures are called steady to higher. The heavy supply of front-end cattle will be a limiting factor, but August is undervalued compared to the current cash market. The cash market will still be the key for price direction in the near-term. Most trade this week has been marked at $138 in the south, steady to lower than last week. Northern dress trade was working around $234, again slightly lower overall than last week. Trade is likely wrapped up for the week, especially with the Holiday weekend on the horizon. Thursday’s slaughter estimates totaled 124,000 head, 2,000 more than last week, and 7,000 greater than a year ago, as the front-end supply still has plenty of cattle. Beef carcass cutout values were lower at midday and finished with losses, with choice values losing .88 to 264.00 and Select was .24 lower to 240.57. The load count was light at 102 loads. The weakness in retail values is a limiting factor in prices. USDA announced weekly export sales on Thursday morning and new sales of 17,000 MT for 2022 were up 52% from the previous week and 6% from the prior 4-week average. South Korea, China, and Japan were top buyers of U.S. beef last week. Feeder cattle posted triple digit gains as the grain market sold off aggressively after the USDA report on Thursday. Feeder Cash Index values were 2.36 higher to 166.44, reflecting a firmer countryside cash market tone.
HOGS
Hog market calls are steady to lower. The hog market will likely stay choppy, but the break down in prices on Thursday is concerning going into the end of the week. The market may be anticipating some potential softness building in the cash market, though cash trade has stayed firm overall, as packers bid up for hog supplies. Direct morning trade was softer on Thursday losing 3.75 to 116.11, the 5-day average traded to a rolling average price of 117.72. The Lean Hog Cash Index traded .38 lower to 111.26. Demand has been more of a concern, and closing carcass values were lower, losing 1.31 to 107.25. Load count was light to moderate at 221loads. Futures experienced technical selling as prices closed under the 200-day moving average in the Aug contract. The sellers stepped forward, despite the USDA quarterly hogs and pigs report reflecting the continued tightening of the U.S. hog supply. The report failed to bring any big surprises, which led to some profit taking and technical selling. USDA Weekly exports sales released on Thursday morning saw new net sales of 32,300 MT for 2022 were up 27% from the previous week and from the prior 4-week average. Top buyers of U.S. pork last week were Mexico, Japan, and Australia.
Author
Matt Strelow