TFM Sunrise Update 4-21-2022


Corn futures were weaker overnight in light volume following a strong finish across the complex on Wednesday.  There is talk that Wednesday’ rally in corn, beans and soy oil may have been linked to short call traders liquidating positions.  A sharp downward reversal in the dollar is also noted.  Meanwhile, the U.S. Midwest weather forecast may be turning warmer and drier which could help start planting.  Brazil is dry and could be lowering their 2nd corn crop.  July corn is down 2-1/2 cents this morning to 8.07-1/2.  Dec is down 4 to 7.44-1/2.  Trade estimates for this morning’s USDA Weekly Export Sales are 950,000 to 1.50 mil tons for old crop, 400,000 to 800,000 tons for new crop. On Wednesday, Managed funds were net buyers of 9,000 corn, and are now estimated to be long 387,000 corn contracts.


The soybean complex was mixed again overnight with July beans  unchanged at 17.17 and Nov down 2 to 15.27-1/2.   Meal futures are down slightly and soy oil is firm.  Trade estimates for this morning’s USDA Weekly Export Sales are 300,000 to 1.0 mil tons for old crop beans, 200,000 to 950,000 tons for new crop.  Meal sales are seen coming in between 75,000 and 250,000 tons for old crop, zero to 100,000 tons for new.  Soy oil sales estimates are zero to 15,000 for old, zero to 10,000 for new.  On Wednesday, Managed funds were net buyers of 7,000 soybeans, 4,000 soymeal and 2,000 soy oil, and are estimated to be long 190,000 soybeans, 103,000 soymeal and 93,000 soy oil.

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Wheat futures were narrowly mixed overnight.  July Chicago wheat is down 3 to 10.94-1/2.  The actively traded KC contract is down 4-1/2 to 11.65.  July MPLS wheat is up 1-1/2 to 11.73-3/4.  On Wednesday, Managed funds were net sellers of 6,000 Chicago wheat, and now estimated to be long 6,000 contracts.  Trade estimates for this morning’s USDA Weekly Export Sales are zero to 350,000 tons for old crop, 150,000 to 400,000 tons for new crop.  Russian wheat export prices are a discount to U.S.  However, wheat fundamentals are bullish with the two-week U.S. south plains forecast warm, dry and windy.  The U.S. north Plains remain wet slowing plantings there.  Canada’s prairies are wet and cold.


The cattle market is called mixed to higher for today after yesterday’s strong finish fueled by cash market strength and technical buying.  June futures closed back above the 100-day moving average,  and with the strong price action, are open to challenge the 140.00 level or higher.  Cash trade began to build on Wednesday with Southern live deals marked at $139 to $141, mostly $140, $1 higher than last week’s weighted averages.  In the North at $228 to $236, mostly $230, $4 higher than last week’s weighted averages.  Some regional packers saw strong bids to 146 in Nebraska, but the higher trend is well established.  Beef cutouts were softer, closing lower (Choice 268.82 -1.11; Select 256.53 -2.68), with improved box movement of 137 loads. The market will get more demand news with the Weekly export sales report this morning.  Feeders saw buying strength supported by the live cattle strength, and a softer early tone in the grain markets.  Apr feeders are still tied to the index, gained .17 to 154.66 but is running at a discount to front-month futures and could be a limiting factor.  Tomorrow’s COF report is expecting to see feeder placements decline year-over-year, which could support Feeder prices.  Overall expectations for the report are: Total cattle on Feed at 100.4%, Placements at 92.2%, and Marketing at 98.2% of last year.


The hog market is called to open mixed.  Bear spreading stayed the theme in the hog futures market, as the premium of futures to the cash market weighed on front month contracts and posted triple-digit losses.   The selling pressure in the front end of the market is trying to tighten the premium to the cash market.  June hogs are weak technically and look to be ready to challenge support at the 108.000-110.000 level.  This price area will be a key level to help maintain the current uptrend in the market.  The cash market has been a concern, but midday values saw some strength on Tuesday, but prices were softer on Wednesday.  National Direct midday values were .67 lower compared to Tuesday, and the weighted average price was 99.02 and the 5-day average firmed to 97.92.  The Lean Hog Index was softer losing .35 to 99.98.  The deferred futures premium over the index is concerning and a limiting factor, as May is holding a 12.495 premium to the index.  Pork carcasses were higher at midday trading 2.82 higher, and held gains into the close, finishing 1.37 higher to 108.49.  The load count was light at 253 loads.


Matthew Strelow

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