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Good morning, this will be the last edition of the TFM Sunrise Update. Beginning Monday, August 1, we are switching to a TFM Morning Update, which will be published and emailed daily by 8:00 a.m. CST. This new format will contain an expanded amount of information, including weather maps and more.
Corn futures were firm last night. Nearby Sept futures traded 4 cents higher to 6.19 and look to close out the month of July where they began. Dec corn was up 4 to 6.23. For the month, the new crop contract is up 4 cents and back to the its 200-day moving average after trading much of the month below. Hot, dry weather forecasts underpin corn prices. In addition, in outside markets, the dollar is down and at a 3-1/2 week low. Crude is up 1.28/bbl. Stock index futures are firm, gold higher. Basis bids for corn shipped to the U.S. Gulf Coast for export fell on Thursday on softening demand for high-priced supplies of old-crop grain as the new-crop harvest approached in far southern reaches of the crop belt, traders said.
Soybean futures were higher overnight with August up 10-3/4 cents to 16.20 and Nov up 21 to 14.61-1/2. For the month, Nov is up 3 cents after trading a multi-month low at 12-88-1/2 one week ago. August meal was up 8.20 to 497.90 while soaring to new highs this week. September soy oil gained 1.56 to 65.56 in a strong move higher. The hot and dry forecast into the August 10 time frame looks to threaten soybean yields and keep a bid under prices heading into the weekend. Spot basis bids for soybeans did fall at U.S. Midwest river terminals on Thursday. Overnight, Chinese Ag futures (SEP 22) Soybeans were up 74 yuan; Soymeal down 7; Soy oil up 310; Palm oil up 356; Corn up 3. Malaysian palm oil prices overnight were up 349 ringgit (+8.82%) at 4306.
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Wheat futures were firm overnight. Sept Chicago was up a dime to 8.27. The contract is down 57 cents this month while staying below its 200-day moving average. Sept KC gained a nickel to 8.94-3/4, down 57 cents for the month. Sept MPLS was up 4 to 9.32, down 58 cents this month. Uncertainty over the ability of Ukraine to export wheat through the Black Sea is keeping traders on edge as relatively wide price swings play out on almost a daily basis. In the U.S., farmer sales are slow. Spot basis bids for hard red winter wheat were unchanged at rail and truck market terminals across the southern U.S. Plains on Thursday, grain dealers said.
Cattle calls are for steady to lower as prices move into a more range bound trade challenging support levels. The weaker cash tone and the concerns about consumer demand limit the market’s rally potential. The weaker price action is a concern that front-end futures are looking to test support back to the 200-day moving average, near $140 in the October live cattle futures. Cash trade has stayed disappointing overall this week with light trade this week at $135 in the south, steady to $1 lower, and northern trade at $225, down $2 from last week. Most trade is likely wrapped up for the week. Thursday’s slaughter totaled 121,000 head, 2,000 below last week, but 1,000 more than a year ago as overall numbers have stay firm, but carcass weights are lower, tightening production. Midday carcass values were soft, adding to the selling pressure and stayed lower into the close as Choice carcasses lost .22 to 267.77 and select was 1.00 lower to 240.81. The load count was light at 99 loads. Feeder cattle stay under pressure from the strong grain markets. Like live cattle, a pull back to the 200-day moving average looks like a downside target on the front month futures. The Feeder Cash Index jumped 1.91 higher to 172.55 but is still trading a discount to the futures market.
Hogs are called mixed. The cash market has been volatile, but still overall supportive. The soft close on Thursday may set the market up for some price pullback going into the end of the week. The strong cash market supported the August futures, but economic concerns and consumer demand limited gains in the deferred contracts. Hog futures saw weak price action, which could lead to additional selling pressure on today’s open. Volatile cash markets pressured the hog market overall. Midday direct hogs were sharply higher Wednesday, but gave back most of those gain in Thursday’s trade, dropping 11.20 to a weighted average price of 117.86 and a 5-day rolling average of 123.60. The lean hog cash index still trends higher gaining .25 to 119.73 and is trading at a small premium to the August futures, supporting that contract. The market will be watching the actions of the cash market as forecast for extreme heat will be impacting the Midwest and will likely limit hog movement and weight gains. The retail market is trading at its highest levels in a year and gained value at midday Thursday. Pork carcasses closed 2.00 higher to 128.79. The load count was light at 223 loads.