TFM Sunrise Update 07-27-2022

Provided by Stewart-Peterson Inc.



Corn futures traded narrowly mixed last night.  Sept and Dec corn are down a penny this morning to 5.96 and 5.99-3/4, respectively this morning.  So far this week, Sept is unable trade over 6.00.  6.05 key resistance.  Support stems from talk of warmer and drier Midwest weather in the coming days and technically oversold conditions spurring a short covering rebound.  Big picture, seasonal pressure should keep corn in a downtrend into harvest.  Managed funds were net buyers of 9,000 corn on Tuesday, pushing then net long holding to an estimated 126,000 contracts. Headlines still suggest Ukraine will increase corn exports to 15 mmt.  Still, there are many challenges to ship grain from Ukraine.  There are reports that grain that has been stuck in ports on boats may have seen a sharp decline in quality.  In outside markets, U.S. stocks are higher ahead of the U.S. Central Bank meeting today.  Crude is higher.  U.S. Dollar is lower.  Gold, silver, copper, coffee, cocoa, sugar and cotton are higher.


Soybean futures traded two-sided overnight after trading higher on Tuesday on talk of warmer and drier Midwest weather.  Nearby August futures were up 20 cents to 15.52-3/4 last night.  Nov was up 5-1/2 cents to 13.89-1/4.  August meal gained 2.40 to 474.80.  August bean oil was up 1.44 to 61.86.  Managed funds were net buyers of 13,000 soybeans, 7,000 soymeal and 7,000 soy oil on Tuesday.  They are now net long an estimated 94,000 soybeans, 67,000 soymeal and 16,000 soy oil.  Soybean futures are supported by strong U.S. cash basis and a 30-day U.S. weather forecast calling for warm and dry weather.

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Wheat futures were mixed with a firm tone last night.  Sept Chicago and KC contracts are 3 cents higher this morning to 8.06-3/4 and 8.80, respectively.  Managed funds were net buyers of 12,000 Chicago wheat yesterday, thus evening out their net holding in SRW contracts.  Sept MPLS wheat is up 3-1/2 to 9.32-1/4.  The Wheat Quality Council’s spring wheat tour is this week giving the trade a glimpse of how the crop looks.  The first day in ND estimated the region’s wheat yield near 48.9 BPA vs 29.4 in 2021.  Elsewhere, lower wheat exports from Russia and EU are noted.  U.S. SRW is priced the lowest on the World market.


Cattle calls are for steady to lower.  A strong move in grain prices and the prospect of softening cash cattle markets are weighing on both live and feeder cattle markets.  A light cash trade was reported in parts of Texas Tuesday afternoon with live deals at $135, $1 lower than last week’s weighted average. The rest of cattle country remained quiet.  More significant business will likely develop today or later.  Beef retail values finished the day mixed with Choice carcasses gaining 1.00 to 269.11, but Select closed lower losing 1.12 to 243.88. n The load count was light at 115 loads.  Feeder cattle saw additional long liquidation as prices posted strong triple digit losses.  The Feeder Cash Index traded higher gaining .89 to 169.91, but is still a $8.00 discount to the futures, which will limit the futures’ upside.  The near-term trend is still higher, but front end live cattle are testing support levels and working back to the bottom of the current channel.  The longer range view in the cattle market stays supportive with a tightening supply picture overall and favorable demand, but prices may be looking to reach a summer and seasonal higher.


Hogs are called steady to lower.  Prices are testing recent support levels, but poor price action has the technical picture looking weak, creating the possibility of further downside room.  Cash markets were firm on Tuesday, with morning direct trade trading higher, gaining 1.73 to 116.05 and a 5-day rolling average of 120.15.  The Lean Hog Index is trending higher, reflecting the overall cash market tone.  The index gained .91 to 119.13, but is trading at a premium to the August futures market and should support front month prices.  Pork carcass values traded softer on Tuesday, closing 1.05 lower to 126.77.  Demand was good at 299 loads.  Estimated slaughter for Tuesday was 467,000 head, 7,000 over last week, but down 7,000 head from last year.  The firm cash market and strong demand tone will continue to provide support under the hog market, but the market was due for some price pullback.



Matt Strelow

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