TFM Sunrise Update 06-30-2022

The CME and Total Farm Marketing offices will be closed Monday, July 4, 2022, in observance of Independence Day


Corn futures were traded lower overnight ahead of this today’s Quarterly Grain Stocks and Planted Acreage report.  July corn was down 7 cents to 7.63-1/4, Sept corn fell 6 cents to 6.58, and Dec was down 6-1/2 to 6.47-1/4.  Today is the end of the month before a 3-day holiday weekend.  Firm U.S. cash basis suggests USDA June 1 stocks could be below the trade average.  The agency could increase U.S. corn acres from March.  The trade range is 2.6 mil acres with the average falling near 89.8 vs the agency’s March estimate of of 89.5 and 93.3 last year.  Over the last 17 years, USDA June 1 corn stocks numbers have been higher than the trade guess 7 times and lower 10.  Prior to the 11 AM CT release, USDA will also report weekly U.S. export sales.  Sales should still be below the pace to push futures higher.  Weekly corn old crop sales are estimated at 200,000 to 700,000 metric tons vs 672,000 last week and new crop 100,000 to 500,000 mt vs 358,000 last week.


Soybean futures were mixed overnight with a weaker theme.  Nearby July beans are down 3 cents this morning to 16.71-1/4, August down 2-1/2 to 15.69, and Nov down 6 to 14.72-1/4.  Meal and soy oil are also down slightly.  Today’s USDA report, month end, quarter end, July first-notice-day and Weekly U.S. export sales are all on tap for today.   A wide range in trade guesses for U.S. June 1 stocks suggest the actual USDA number could result in a volatile, quick reaction.  The trade range for US 2022 soybean acres is 3.6 mil acres with an average of 90.4 vs USDA’s March estimate of 90.9 and 87.2 last year.  Over the last 17 years, USDA has been above the trade soybean estimate 10 times and below 7.  Weekly soybean old crop sales are estimated at 100,000 to 300,000 tons vs 29,000 last week.  New crop sales are estimated from 100,000 to 500,000 tons vs 265,000 last week.

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Winter futures were mixed overnight while struggling with headlines of higher Russia wheat exports and better EU and U.S. and Canada crop weather.  Last year, EU and U.S. wheat futures made a seasonal bottom the first week in July.  Sept Chicago wheat was unchanged last night at 9.30.  KC wheat was up 7 to 9.98-1/4.  Sept MPLS wheat was down 2-1/2 cents o 10.26.  Spring wheat continues to slide lower on better U.S. weather and lack of new export demand.  Some market pressure stems from zero U.S. wheat offers for the Egyptian tender amid talk of a lack of U.S. gulf export capacity that may have limited U.S. offers to Egypt.  Looking back at the June 30 Quarterly USDA reports, over the last 17 years, USDA has been above the trade wheat June 1 stocks estimate 10 times and below 7.  The average guess for U.S. 2022 wheat acres is 47.0 vs the March estimate of 47.3 and 46.7 last year.  This morning’s USDA Weekly Export Sales are estimated 200,000 to 600,000 tons vs 477,000 last week.


Cattle futures are called mixed to weaker after finishing mostly lower again on Wednesday, as prices seek support.  Live cattle futures are watching the development of cash markets and weigh the concerns regarding still heavy front-end supplies of cattle.  June cattle expire today and have stayed tied to the cash trade.  With cash trade at $138 or better, August is looking undervalued as the June contract is coming off the board tomorrow.  Beef carcass cutout values were lower at midday and closed even lower at the end of the day with Choice values losing 2.26 to 264.88 and Select was 2.50 lower to 240.81.  The load count was light at 118 loads.  As the retail demand window moves past the 4th of July holiday, demand may be more of a concern going into the heart of summer.  The weakness in retail values is a limiting factor in prices.  Feeder cattle posted triple digit losses with the weakness in live cattle and technical selling pushing the market.  Feeder Cash Index values were .12 lower to 164.08.   Mid-summer demand and large front-end cattle supplies are limiting factors in the market.


Hog market calls are steady to higher.  The hog market will likely stay choppy, but the confirmation of an overall tighter hog supply will keep the market supported.  The cash market is still surging higher, and that should help the futures market overall going forward into the summer.  Just keep an eye on demand and the impact of the consumer.  The USDA released the Quarterly Hogs and Pigs report after the market close, and the report was neutral according to expectations, but did confirm an overall tighter hog supply. Total hogs and pigs as of June 1 at 99% of last year.  At 72.5 million head, this is the lowest pig herd in 4 years.  Animals kept for breeding at 99% of last year at 6.17 million head is a 5-year low. Lastly, animal kept for marketing at 99% of last year.  With no big surprises, the hog market will shift the focus back to the major fundamentals.


Matt Strelow

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