TFM Sunrise Update 5-12-2022


Corn futures traded two-sided overnight and are at the lower end of their trading ranges this morning.  July corn traded an overnight high of 7.92-1/4 and low of 7.82-3/4 and is down 4 cents to 7.84-1/2 this morning.  Dec corn is unchanged at 7.35-3/4.  Trade estimates for this morning’s USDA Weekly Export Sales are 350,000 to 700,000 tons for old crop, 150,000 to 650,000 tons for new crop.  At 11:00 Central, the USDA May WASDE report will be released.  The trade estimate for 2021/22 carryout is near 1.412 bil bu vs USDA 1.44 bil.  2022/23 production is estimated to be around 14.773 billion bushels, using a 179.6 average yield.  Some analysts doubt USDA will drop U.S. corn yield from 181 vs crop watchers’ 177 BPA.  USDA has used their outlook corn yield on the May report every year since 2014.  We’ll see how the agency handles Ukraine’s 2022/23 corn exports.  Crude, gold, silver, copper, cotton, coffee, cocoa, and sugar are lower this morning.  The U.S. dollar is sharply higher and making a new high.  For the sixth straight day U.S. stocks are lower.  Concerns over inflation and higher U.S. interest rates will push the U.S. economy into a recession offers resistance to stocks.  Crypto currencies are also lower on a lack of confidence as a hedge against inflation.


Soybean futures were down overnight with July slumping 14 cents to 15.92-3/4.  Nov beans were down 12 cent to 14.60-1/4.  July meal is up 20 cents to 389.10.  July soy oil is down 1.28 to 82.17.  Trade estimates for this morning’s USDA Weekly Export soybean Sales are 1000,000 to 600,000 tons for old crop and new crop.  Soymeal sales are estimated at 20,000 to 300,000 tons for old crop, Zero to 150,000 tons for new crop.  2022/23 soybean production is estimated to come in at 4.613 billion bushels in today’s May WASDE report with an average yield of 51.4 BPA.  2021/22 ending stocks are expected to be down from April with an average estimate of 225 million bushels vs. 260 mb last month.

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The wheat complex was mixed overnight and is in the red this morning.  July Chicago and KC wheat contracts are down 6-1/2 cents to 11.06-1/2 and 11.94, respectively.  July MPLS wheat is off a nickel to 12.51.  Trade estimates for this morning’s USDA Weekly Export Sales are 25,000 to 125,000 tons for old crop, Zero to 350,000 tons for new crop.  Today’s Supply/Demand report has an average trade estimate for 2021/22 ending stocks of 686 mil bu, down from 678 mb last month.


Cattle futures are called steady to lower.  The cattle market looks concerning, as the downside looks to be the easiest path in the near-term.  June is still trading under the 200-day moving average.  This level will continue to be a sticking point for cattle prices, and the longer the market trades below this level, the prospects of a downside break stay in front of the market.  Additional value may support deferred positions, given the overall supply numbers and trend seen in cattle supplies.  Live cattle futures saw mixed trade on Wednesday as the development of cash trade brought some value buying into the cattle market, despite the steady pressure on retail beef prices.  Cash prices started developing on Wednesday mostly steady with last week.  In the South light $140 began to develop, and the north saw $144 and $227-230 dressed trade.  The cash market’s premium to futures supported the front-end of the futures market.  Retail beef demand has weighed on prices.  Choice beef cutout values fell $3.05 Tuesday to $255.24, near an 8-month low.  On Wednesday’s close, prices stayed soft, losing .16 to 255.08 and Select was .17 lower to 242.18.  The load count still shows good movement at 123 midday loads as the discounted retail beef is bringing retail interest.  Feeders are poised to retest near-term lows, as downward momentum continues.  The direction of grain prices will likely dictate the money flow into the feeder market.


The hog market is called lower amid a weak technical picture with prices challenging trendline support.  The selling has been pushed by weaker retail values and stagnant cash markets.  June lean hogs are still showing a downward trend, and prices closed at the lowest level since January on Wednesday, mostly eliminating the entire spring rally.  Prices may still have more downside room as prices have closed under the 200-day moving average, and this keeps an additional downside break as a possibility.  Demand is still a big concern as retail prices have trended lower throughout the spring with grilling demand and export demand lacking punch.  Midday carcass values were .51 higher, but closed softer losing .70 to 99.49, as prices fell under the $100.00 level.  Movement was moderate at 148 loads.  The CME pork cutout index has also been trending lower, down 1.20 to 103.77 on Wednesday.  The market will be watching export sales numbers this morning to watch for an uptick in export demand.


Matt Strelow

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