TFM Sunrise Update 07-21-2022

Provided by Stewart-Peterson Inc.



Corn futures weakened overnight despite strong basis.  Nearby Sept was down 6 cents to 5.86-1/4 and Dec down 7-1/2 to 5.82-1/2.  This morning’s USDA Weekly Export Sales are estimated at (100,000) to 200,000 tons for old crop versus 59,000 last week.  New crop is estimated between 100,000 and 500,000 tons versus 348,000 last week.  Favorable U.S. Midwest weather also limits ne Managed fund buying.  The funds are net long an estimated 149,000 contracts.  Dalian corn futures were lower.  Matif corn futures has been trending higher due to warm and dry EU weather.  On Wednesday, Weekly U.S. ethanol production was higher than last week’s shortened week.  U.S. stocks are down slightly.  Crude is sharply lower.   The dollar is narrowly mixed.  Gold, silver, copper, coffee, cocoa, sugar and cotton are all lower.


The soybean complex was mixed last night with August beans down 14-1/2 cents to 14.57-1/2, Nov down 16 to 13.16-1/4; Aug meal up 1.30 to 437.80; and, Aug soy oil down 1.49 to 58.54.  Trade estimates for Weekly U.S. soybean sales are (200,000) to 200,000 tons for old crop vs (362,000) last week; And, zero to 500,000 tons for new crop versus 114,000 tons last week.  Even though 2 cargos of beans were announced sold to China, people are beginning to doubt USDA’s forecast of U.S. soybean exports.  Overnight, Dalian soymeal, palm oil, and soy oil prices were lower.  Soybeans higher.  Managed funds are net long and estimated 86,000 soybeans, 70,000 soymeal and 15,000 soy oil.  The U.S. 2nd week weather forecast is cooler and wetter with a return to warm and dry weather in August
raising questions about row crop yields.

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Wheat futures traded mostly steady overnight.  Sept Chicago wheat is fractionally lower this morning to 8.19, KC fractionally higher at 8.71; And, Sept MPLS wheat down 2-1/4 to 9.22.  Lower energy prices after Russia reopened the flow of gas into the Nord Stream pipeline is seen weighing on commodity prices including wheat.  Weekly U.S. wheat export sales are estimated from 300,000 to 850,000 tons versus 1.017 mil last week.  Egypt bought 640 tons from France, Russia and EU origin.  Pakistan has given approval for the purchase of some 300,000 ton of wheat in an international purchase tender, a government agency said in a statement on Wednesday.


Cattle calls are for steady to lower.  Live cattle futures remain range bound, unable to make the push through the top of the range.  Prices seem tied to the 100 and 200-day moving averages.   Feeders have lost momentum with August trading a premium to the Feeder Cash Index, which was .17 lower to 172.50, helping limit the front-end of the market.  Cash trade is still developing this week and saw additional light movement on Wednesday.  Nebraska saw dressed trade at $227, down $2 from last week.  More trade will likely build into the end of the day Wednesday and Thursday, but the trend is looking steady to slightly lower.  Beef cutouts closed lower after Tuesday’s overall strength with Choice at 270.53, slipping 2.04 and Select at 242.25, losing 1.48 with light to moderate box movement at 119 loads.  Choice carcass values at $270+ are strong for this time of year, keeping buying support under the cattle market overall.  Tomorrow will bring the next USDA Cattle on Feed report, and that could make the market choppy going into the end of the week.


Hogs are called higher following Wednesday’s higher trade as the futures market tries to keep pace with the cash and retail markets.  The fundamentals in the cash and retail market are strong and keeping the buying strength in the hog market.  The Lean Hog Index is trending higher reflecting the cash market tone.  The index gained 1.02 to 115.91 and is trading at a 1.035 premium to the futures market, supporting the August contract.  With the price move yesterday, the technical picture looks supportive as well as the momentum works higher.  October futures used the strength to clear the 100-day moving average, which has been a lid on prices for the past two months.  Retail values and demand are overall strong, as retail pork values are at their highest prices since last August.   Pork retail values were softer at midday losing 3.34, but firmed into the close only dropping .75 to 124.78.  Movement was light/moderate at 224 loads.



Matt Strelow

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