Provided by Stewart-Peterson Inc.
Corn futures were soft again overnight with nearby Sept down 6 cents to 5.69-3/4 near a 6-month low, and Dec is off 5-1/2 cents to 5.68. Managed funds are estimated to be net long 137,000 corn contracts. Ukraine, Russia, Turkey and U.N. Secretary-General will sign a deal today to resume Ukraine’s Black Sea grain exports. This and U.S. weather is weighing on price. So far, Russia and Ukraine have not yet commented on any new deal. There remains many logistical issues to actually start shipping grain. The U.S. Central Bank war against inflation is also helping deflate price. U.S. corn export commitments are down 13% versus last year. Brazil’s corn prices are at a discount to U.S. with a large 7 mmt vessel corn line up cutting into U.S. sales. Matif corn futures continue to trade higher at a new 1 month high. The EU corn crop could be closer to 55 mmt vs USDA 68. China Dalian corn futures were lower.
The soybean complex was mixed last night with August beans down a nickel to 14.13-1/2. Nov fell 6 cents to 12.95-1/2. Aug meal was down 1.90 to 432.50; And, Aug soy oil gained .28 to 58.88. Over the next 14 days parts of U.S. central Midwest is set to see normal rains and milder temps. The NOAA 30 and 90 day weather update calls for above normal temps and below normal rains, but is biased due to global warming and climate changes. As open interest continues to plunge, bean futures are testing 2022 lows. Concern about lower export demand and a U.S. Central Bank war against inflation is weighing on this market. Managed funds are net long an estimated 71,000 soybeans, 66,000 soymeal and 11,000 soy oil.
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Wheat futures stayed volatile overnight in a lower move across the board at all three exchanges. Sept Chicago wheat gave up 22 cents to 7.84-1/4. Sept KC fell 20 cents to 8.41-3/4. Sept MPLS was down 18 to 8.94-1/2. Wheat futures tried to bounce off an oversold technical picture this week, but are failing in that task at week’s end. The idea that Ukraine, Russia, Turkey and U.N. Secretary-General will sign a deal today to resume Ukraine’s Black Sea grain exports weighs on grain futures. Russia’s wheat crop could be record but quality may be dropping. China bought Australia wheat this week, but the Australia’s wheat crop may be only 27 mmt vs USDA 30 mmt. U.S. wheat export commitments are now near last year for this time of the marketing year. Still, Matif wheat futures are at 2 week highs. Argentina continues to lower planted wheat acres and crop ratings due to dry weather.
Cattle calls are for mixed action ahead of this afternoon’s USDA Cattle Inventory and On Feed reports. The data should still reflect a tightening cattle supply. For Cattle Inventory, All Cattle and Calves are expected to be down 2.1% from last July. Beef cow inventory down 3% from last year. The Cattle on Feed reports is expected to show total cattle on Feed at 100.1% of last year, Placements at 94.7%, and marketing at 102% of last year. The placement number will be closely watch. Placement may still run strong given the drought conditions forcing cattle into lots sooner. Cash trade was still light on Thursday, with some additional trade. Southern cash deals are ranging $136-137, and Northern dress trade at $227, both softer than last week. It is looking like the bulk of business maybe essentially done for the week, although a little cleanup this afternoon and tomorrow is not out of the question. Beef cutouts closed lower with Choice at 267.76, losing 2.77 and Select at 240.53, down 1.72. Load count was light at 105 loads. Feeder cattle finished firmer, supported by the weakness in the grain markets. August feeders are trading a premium to the Feeder Cash Index, which was .08 lower to 172.42, and could limit the front-end feeders.
Hogs are called steady to higher. Thursday’s price action featured some softness, influenced by the outside markets. However, the fundamentals in the cash and retail market are strong and supporting the buying strength in the hog market. The strong cash market tone and premium of the index to the August contract helped prices gap higher to start the session for the second consecutive day. October futures faded of early session highs, as prices consolidated at the top of Wednesday’s trade. Retail values and demand are overall strong, as retail pork values are at their highest prices since last August. Pork retail values were higher at midday, gaining 2.20 to 126.57. Movement was moderate at 148 loads. The Lean Hog Index is trending higher, reflecting the cash market tone. The index gained .46 to 116.46. The strong move in August futures has closed the gap to the cash index. The spread between August and October hogs has widened to 20.950, which should help pull the Oct futures higher, given the cash market.