TFM Sunrise Update 6-24-2022


Corn futures traded two-sided with a firm tone overnight amid a 10 cent trading range between 6.71 and 6.61-1/4 (Sept), and 6.61 and 6.51-1/2 (Dec) ahead of USDA Weekly Export Sales data. Trade estimates range from 300,000 to 600,000 tons for old crop, and 200,000 to 600,000 tons for new crop.  Nearby July corn was down 4 cents to 7.42-3/4.  On Thursday, Managed funds were net sellers of 30,000 corn, and are now estimated to be net long 250,000 contracts.  World Weather, Inc forecasts crops in the Delta, lower and eastern Midwest, Tennessee River Basin and parts of Texas will be most significantly stressed in this first week of their outlook.  The second week of the forecast will bring relief to the drier areas in the eastern and southern Midwest, Delta and Tennessee River Basin as showers and thunderstorms evolve while temperatures are less hot.  The third week of the outlook will restrict rain in the Delta, the southwestern and west-central Corn Belt and central and southern Plains and temperatures will be warmer biased once again many of those areas. The eastern and northern Midwest, however, should see additional bouts of timely rainfall support corn reproduction and soybean development.


Soybean futures were mixed overnight and are firm this morning underpinned by ideas that the trade will be looking for a drop in U.S. row crop ratings next Monday.  Nearby July beans are trading 4 cents higher to 15.97-1/4.  Nov is up 2 to 14.17-1/4.  On Thursday, Managed funds were net sellers of 26,000 soybeans, 5,000 soymeal and 10,000 soy oil, and are now estimated to be net long 117,000 soybeans, 50,000 soymeal and 44,000 soy oil.  Trade estimates range from (100,000) to 300,000 tons for old crop, and 50,000 to 500,000 tons for new crop.  

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Wheat futures continued to make new lows for the move overnight before reversing higher.  Sept Chicago wheat was up nearly 20 cents to 9.69.  On Thursday, Managed funds sold 11,000 contracts and are estimated to be net short 15,000.  Sept KC wheat was up 13 cents to 10.23-3/4. Sept MPLS wheat was narrowly mixed while under the influence of winter wheat contracts, and are up 2-1/4 cents to 10.82 this morning.  Trade estimates for this morning’s USDA Weekly Export sales are 150,000 to 400,000 tons while off to a slow start.


Cattle futures are called mixed to lower as traders wait for the afternoon Cattle on Feed report.  Expectations for the report are total cattle on feed at 102%, placements at 100%, and marketed 103% of last year.  The market will be closely watching the placement numbers to gauge the cattle crop going into the end of the year and 2023.  Thursday’s Cold Storage report showed total red meat supplies in freezers were down slightly from the previous month but up 20 percent from last year.  Total pounds of beef in freezers were down 2 percent from the previous month, but up 25 percent from last year.  The increase in storage for both beef and pork from a year ago is significant.  Boxed beef has been dropping over the past two weeks and more beef in storage adds to the negativity.  The report shows people are using less meat, both beef and pork compared to a year ago.  Frozen boneless beef in May was at a record storage for 2022.


Hog market calls are steady to lower following Thursday’s steep sell-off.  Funds began liquidating positions which may carry over to today.  Nearby July hogs, at 108.55 have run into stiff resistance at the contract’s 100-day Moving Average and are now situated squarely between that ceiling and 200-day Moving Average support situated near 104.25.  Thursday’s Cold Storage report is old news, so the impact of a report close to a month old has to be questioned.  The report showed frozen pork supplies were up 2 percent from the previous month and up 17 percent from last year.  Stocks of pork bellies were down 3 percent from last month but up 55 percent from last year.  The data showed people are using less meat, both beef and pork compared to a year ago.  Pork is not at record levels,  but it is up 25% from a year ago and it is significant when Federal USDA Hog Slaughter is down 4.5% from the same period a year ago.  The U.S. is killing fewer hogs but it is storing more pork.  Pork in storage goes along with low exports down the first quarter 21% and especially to China who was a large buyer of U.S. frozen pork for their storage.  Now, China is buying their own pork for storage.  Hog traders are going to wait to see next week’s Quarterly Hogs and Pigs report especially farrowing expectations.


Matthew Strelow

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