TFM Sunrise Update 3-8-2022


Corn futures were mixed overnight after reversing from Monday’s rally.  May corn is down 8 cents this morning to 7.42-3/4, mid-range of last night’s 26-1/4 cent trading range.  December corn is down 3 cent to 6.29-3/4.   On Monday, Managed funds were net buyers 2,000 corn and are estimated to be net long 389,000 contracts.  The U.S. dollar is lower this morning.  Crude is higher and near $119 with talk of Russia possibly stopping fuel exports to Europe keeping the markets on edge.  Gold, silver and copper are higher with gold trading near $2,010.  We’ll get the March Supply/Demand numbers from USDA tomorrow at 11:00 AM Central.  Season to date U.S. corn exports are near 975 mil bu or down 11%.  However, U.S. corn 2021/22 carryout could fall near 1.20 bil bu vs USDA’s 1.540. Some estimate Black Sea corn exports could be down 15 mmt.  South America corn exports could be down 10 mmt.


The soy complex traded higher overnight.  May beans were up as much as 19 cents to 16.78-1/2 while continuing to bump up against a level of resistance at the daily highs posted over the past 5 sessions.  The recent contract high from February 24 rests up at 17.59-1/4.  November beans were up 7 cents to 14.60.  May meal rose $5.50 per ton to  464.20; And, May soyoil is up .43 to 74.65 amid sharply higher World rapeseed prices.  On Monday, Managed funds sold 1,000 soybeans and 2,000 soymeal, and are net long an estimated 205,000 soybeans, 98,000 soymeal and 92,000 soyoil.  Chinese Ag futures overnight had May soybeans down 49 yuan; Soymeal up 75; Soyoil down 154; Palm oil down 152; Corn down 25;  Malaysian palm oil prices overnight were down 210 ringgit (-3.17%) at 6416.  Upcoming fundamental data lies ahead with the USDA March World crop report tomorrow, followed by CONAB’s South American crop update Thursday.  USDA will need to decide either use CONAB’s Brazil soybean crop of 125 or trade estimate of 129.  Brazil’s soybean harvest is near 50% complete.

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Wheat futures are mostly lower this morning with the exception of the May Chicago wheat contract.  On Monday, Managed funds were net buyers of 14,000 Chicago wheat pushing their net long position to an estimated 45,000 contracts.  Daily trading limits have been expanded to $1.30 per bushel for the winter wheat contracts today.  May Chicago rallied as much as 68-3/4 cents to a new high of 13.63-1/2 last night before easing to 13.13 this morning.  The rest of the winter wheat complex is registering double digit losses.  Spot basis bids for hard red winter wheat fell at terminals across the southern U.S. Plains on Monday as grain buyers reacted to soaring futures prices, spurred higher by the conflict in Ukraine.  May KC wheat is down 18 cents to 12.33-1/2 this morning versus last night’s high of 12.72-1/4.  May MPLS wheat is down 18 cents to 11.79-1/2.  On Monday, USDA rated the Kansas crop at 24% Good-to-excellent compared to 25% last week;  Texas also dropped 1 point to 7% and Oklahoma’s crop index rose to 16 G/E from 11%.  The World wheat supply could be down 20 mmt from USDA’s last estimate.  USDA estimates U.S. 2022 winter wheat acres at a 6-year high at 34.4 million.  Season to date U.S. wheat exports are near 582 mil bu or down 15% from last year.


Cattle futures are called steady to higher following a strong price recovery to start the week as live cattle and Feeder cattle markets posted triple digit gains.  After 8 consecutive down days, the buyers stepped back in to the cattle market after prices may have moved into value territory.  The cash market was quiet to start the week.  Cash trade was softer last week, and that is expected for this week as well.  With cash in the $138-140 window, futures were a discount, helping bring buying support.  Demand concerns have pressured the market as consumer inflation and potential tighter consumer money flow could limit beef demand.  This has pressured boxed beef values recently.  Boxed beef was lower again overall last week.  On Monday, boxed beef prices were tried to gain traction and closed higher (choice: +.38 to 254.71, select: +1.81 to 250.22) with demand light at 102 loads.  The quieter tone helped support the feeder price recovery.  The Feeder Cattle Cash Index was .82 lower to 155.37 and trading at a small premium to the futures market.


Hogs are called lower.  Hog futures tried to find some footing with strong retail values at midday, but the technical selling after Friday’s break lower kept the sellers in place.  The April chart broke a “bear flag” pattern on Friday, setting up the limit move lower to end the week.  Despite expanded limits on Monday,  prices were choppy, before settling lower.  April hogs tested the 98.000 level, and could be poised for further correction to the $96.000 the 50-day moving average.  Pork cutout values were firmer.   At the close, pork carcasses gained 2.66 to 106.65.  The load count was moderate at 310 loads.  Cash has been supportive with the National Direct morning trade trending higher last week, but was unreported today due to “confidentiality”.  The 5-day rolling average was at 92.08, and the Cash Lean Hog Index was 0.13 lower to 99.57.  Technically, the hog market broke lower and is technically challenged for further downside correction.  The fundamentals stay supportive overall, but the technical selling will likely drive the market.


Matthew Strelow

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