TFM Sunrise Update 3-11-2022


Corn futures were mixed overnight.  The May contract was up 6-1/2 cents to 7.62-1/4 and is up 7 cents for the week.  December corn was unchanged at 6.51-3/4 and up 22 cents and poised to make new highs.  July corn, trading just under 7.30 should gain on Dec due to expectations for better Weekly U.S. corn export sales and talk more Global demand is switching to the U.S.  On Thursday, Managed funds bought 20,000 corn, and are now estimated net long 391,000.  Prices remain propped up by inflation, concern over Ukraine’s 2022 supply and U.S. spring and summer weather that could send food prices even higher.  Crude oil formed a near-term top this week and was down 23% for the week as of yesterday’s close on talk of higher supply.  Futures are up 3.75 this morning.  The dollar is higher and stock index futures are firm.


Soybean futures are weaker this morning with the May contract off 6 cents to 16.80-1/4.  For the week, the old crop contract is up 20 cents after seeing some profit taking following the recent run-up and failure to close over 17.00.  November beans are down 7 to14.85-1/4.  The new crop contract gained 35 cents this week.  May meal is done $3 per ton to 480.70, up 20.30 per ton on the week.  May soyoil is down 1.27 to 73.41 after China sold 59 mt of soyoil out of their reserve.  However, futures are up .60 for the week.  Malaysian palmoil futures were lower after February exports were lower than
expected.  Meanwhile, Canadian canola is at new highs.  On Thursday, Managed funds bought 11,000 soybean contracts, 4,000 soymeal, 2,000 soyoil and are now estimate to be net long 219,000 soybeans, 111,000 soymeal and 93,000 soyoil.

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Wheat futures are higher this morning after correcting lower from contract highs the past few days.  May Chicago futures are up 22-1/2 cents to 11.09-1/2.  On Thursday, Managed funds were net sellers of 20,000 Chicago wheat and are now estimated short 5,000 contracts.  For the week, the contract is down $1.00 per bushel from last Friday’s locked-limit trade at 12.09.  This week’s contract high price action followed by long-liquidation selling pressure closed the gap left on the chart from the start of the week.  May KC wheat is up 30-1/2 cents to 10.96-1/4 this morning and down $1.18 on the week.  May MPLS spring wheat is up 35-1/4 cents to 10.90-1/4, down $1.24 for the week.  Look for volatility to continue as scenarios play out in the Russia/Ukraine war.  Concerns loom over whether, or not 15 mmt of World wheat will be shipped out of the Black Sea and EU, and if Ukraine will be able to harvest their winter wheat crop.


Cattle futures are called steady to lower after a tough outing on Thursday fueled by a move higher in corn and soybean prices.  This trend is likely to hold as grain markets are seeing strong money flow.  With the weak price action, live cattle futures look to be targeting a re-test of last week’s low.   The majority of light cash trade is likely done for the week.  Most trade was at $138, down $2.00 from last week and a disappointment to the market.  Retail values caught a bid at midday on Thursday and closed higher, (Choice: +1.24 to 253.94, Select: +2.58 to 247.37) with demand light at 106 midday loads.  Weekly exports sales reflected an improved demand tone.  Posted new sales for last week were at 27,500 MT, a marketing year high.  China, Japan, and South Korea were the top buyers of U.S. beef last week.  With a price gap lower, and a contract low close, the feeder market may be challenged to reverse course into the weekend.


Hogs are called steady to higher after finishing mixed to mostly higher with the exception of the front end of the market as the premium to cash and weak export sales limited gains.  The price pressure on April hogs continues, as prices are testing the 40-day moving average on the chart.  This level held on the last test, but with the weak price action, price may be poised to pushed lower.  Pork cutout values were softer on Thursday, losing 3.54 to 104.20, giving back some gains after Thursday’s strong close.  The load count was moderate at 330.81 loads.  Weekly export sales took a step back, with new sales totaling 25,400MT, down 40% from last week.  Mexico, China and South Korea were the top buyers of pork last week.  Cash has been supportive but the National Direct morning direct trade was .42 lower to 101.56 from Wednesday.  The Cash Lean Hog Index was .26 higher to 99.26. The April futures were trading at a 2.150 premium to the index going into Thursday, and that limited gains.


Matthew Strelow

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