CORN
Corn futures continued to erode overnight as the calendar turns over to June. July corn slumped as much as 5-3/4 cents to 7.46-3/4, within 1/2 cent of yesterday’s fresh 7-week low. Dec corn slipped 6-1/2 cents to 7.05 to within 1-1/4 cents of the low from May 9. Prices trading solidly below their respective 50-day moving averages signal more weakness for the trade as 2022 planting progress winds down. USDA reported 86% of the crop planted in their weekly update on Tuesday afternoon, up from 72% a week ago and in line with the 5-yr average. 61% of the crop has emerged vs 39% a week ago and the 68% 5-yr average. On Tuesday, Managed funds were net sellers of 23,000 corn and are now estimate to be long 248,000 contracts. In outside markets, the dollar, which probably triggered some of yesterday’s lower grain trade when the currency rallied, is up 17 points this morning. Crude is up 1.58 while staying strong. Gold, silver, copper, sugar and cotton are higher. Meanwhile, the trade still waiting for news if Russia will allow for Ukraine food exports. There is a June 8 meeting between Russia and Turkey concerning Ukrainian exports. The EU has increased Russia sanctions.
SOYBEANS
Soybeans futures consolidated yesterday’s lower trade overnight, and are firm this morning. July beans are up a nickel to 16.88-1/4. Nov is up 7-1/2 cents to 15.17. However, sharp bearish reversals posted in Tuesday’s trade may lead reinvigorate the bears in the absence of widespread weather concerns. Planting progress will continued to be monitored in North Dakota and parts of Minnesota where weather has stymied progress. USDA pegged soybean planting at 66% completed versus 50% last week and 83% a year ago. The 5-year average is 67%. 39% of the crop emerged vs 21% a week ago, 59% a year ago and a 43% average. July meal futures recovered 2.70 last night to 417.50. July oil is down .78 this morning to 77.14. On Tuesday, Managed funds were net sellers 14,000 soybeans, 8,000 soymeal and 3,000 soy oil. They are estimated net long 166,000 soybeans, 46,000 soymeal and 71,000 soy oil. Overnight, Chinese Ag futures Sept beans were down 6 yuan; Soymeal down 61; Soy oil down 18; Palm oil down 10; Corn down 38. Malaysian palm oil prices overnight were up 56 ringgit (+0.89%) at 6360.
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WHEAT
Wheat futures were firm overnight as sellers refrain from pushing prices lower into the new month. July Chicago wheat is up 3 cents to 10.90-1/2 this morning. On Tuesday, Managed funds were net sellers of 21,000 Chicago wheat and are now estimated to be net short 1,000 contracts. July KC wheat is up 7 to 11.72-1/2 this morning. Winter wheat futures are rated 29% good-to-excellent, up 1 point from last week, but down from last year (48%). 72% of the crop is ‘headed’ compared to 63% a week ago, 40% a year ago and the 43% average. July MPLS futures are up 6-3/4 cents to 12.54-1/4. The spring wheat crop is 73% planted versus 49% a week ago, 97% a year ago and 92% average. 42% is emerged vs 29% last week, 78% a year ago and 69% average. U.S. central and south Plains and Midwest forecasts call for normal rains. The U.S. north Plains are to remain wet. Meanwhile, the trade still waiting for news if Russia will allow for Ukraine food exports. Production-wise for the country, the Ukrainian Grain Association recently cut its estimated production for winter wheat to 20.1 million metric tons, down from 31.4 mmt last year.
CATTLE
Cattle futures are called mixed to lower following a difficult start to the holiday-shortened week of trading. Selling pressure is pushing prices to new nearby lows amid concerns regarding demand and the tighter consumer dollar. Funds have been liquidating long positions, and the CFTC report has shown that managed money reduced their net long position in live cattle to just 16,314 long contracts and growing their net short position in feeder cattle bringing it to 8,996 short contracts. Cash has been called steady to lower this week. Talk of $135 southern deals with some regional reports of up to $145 depending on location. Overall cash has trended lower the past two weeks. Retail boxed beef closed higher with Choice up 2.12 to 267.54 and select up 2.15 to 248.65. The load count was moderate at 144 loads.
HOGS
Hog futures are called steady to lower on the heels of strong selling pressure to start the week as the market saw end-of-the month profit taking led by the large premium of the futures market over the cash market. The inability for June hogs to get through the 100-day moving average turned into a sell signal to start the week. Prices gapped lower on the open and closed near the bottom of the daily range. The technical picture stays weak into Wednesday after prices closed under the 10-day moving average. The next level of support will be the 20-day at 105.350, with a possible test of the 200-day at 102.900 area. The cash market has been supportive under the hog futures while trading a discount, and midday direct trade turned back higher on Tuesday afternoon. Midday direct trade was 0.55 higher with the weighted average at 109.09 on Wednesday, and the 5-day average moved lower to 110.75. The CME Lean Hog Index is reflecting the higher cash tone overall and gained 0.53 to 104.93. Estimated slaughter last week was 2.351 million head, down 2.6% from last week, and 1.1% from last year. Hog dressed weights were unchanged from last week’s average at 219 pounds, but still 2.3% higher than last year. Despite lower slaughter numbers, the excess pounds keep overall pork production up 0.9% over last year. The extra pork in the cooler in a demand concerned market helps weigh on prices. Retail values trended higher at midday and held gains into the close with carcass values 1.55 higher to 107.71. Movement was good at 342 loads. The CME Pork Cutout Index slipped .23 to 107.32. The hog market rally may have run out of gas in the short-term, especially with the pull back in prices on Tuesday.
Author
Matt Strelow