TFM Sunrise Update 6-27-2022


Corn futures traded lower overnight with nearby July down 6 cents to 7.44-1/4 and Dec down 13-1/2 cents to 6.60-1/2.  This week is month end and quarter end, as well as a key USDA acreage and
June 1 stocks report.  Trade estimates U.S. June 1 wheat stocks are near 655 mil bu vs 845 last year.  Corn stocks are seen near 4.343 bil bu vs 4.111 last year.  The key will be the percentage of corn and beans on farm and off farm.  USDA will also update U.S. planted acres by crop.  A wet spring may have reduced corn and wheat acres but raised soybeans.  Trade estimates for U.S. corn acres are near 88.8 mil vs 89.5 in March and 93.3 last year.  Soybean acres are near 90.4 mil vs 90.9 in March and 87.2 last year and all wheat acres at 47.0 vs 47.3 in March and 46.7 ly. US spring wheat 10.8 vs 11.2 in March and 11..4 last year.  Weekly Export Inspections will be out this morning.  Weather-wise, over the next 2 to3 weeks there will be showers around the Midwest favoring Eastern KS, to KY and Southern IN.  Showers could be lighter in IA, Northern IL, WI and MI.


Soybean futures were up overnight following last week’s price retreat.  The complex bounced Friday, but still ended the week with losses amid a collapse in Chinese markets fueling global demand fears.  U.S. outstanding soybean export commitments are record large, but China record meal stocks and negative crush margins are asking questions about Chinese demand.  The July contract was up 11-1/2 cents to 16.22-1/4 overnight.  Nov beans rose 6 cents to 14.30-1/4.  August soymeal was up 2.50 to 413.90, and Sept oil rose .93 to 67.86.  Indonesian palm oil stocks rose to their highest level since records began in 2016.  This week’s G7 meeting will press for temporary waivers on biofuel mandates.

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Wheat futures traded two-sided overnight and are in the black this morning with Sept Chicago up a dime to 9.33-3/4, KC up 7-1/2 to 10.00 and MPLS up 4-1/2 to 10.75-1/4.  Nearby world wheat futures fell to their lowest weekly close since the first week of the Ukraine war.  A fast U.S. harvest pace and early start to the European harvest, rising private estimates of Russian and Ukraine crops, more political talk of export corridors from Ukraine, and general fears of worldwide economic slowdown/recession, all contributed to volume risk-off selling.  However, consumer demand is starting to surface in places like Algeria, Tunisia, Saudi, Bangladesh and Pakistan).


Cattle futures are called mixed to firmer.  Live cattle futures finished mixed to end last week with cash trade complete for the week and the market positioned for the USDA Cattle on Feed Report.  The report showed that total cattle on feed as of June 1 at 101% of last year, just slightly below analyst estimates.  Placements were 99% of last year, also 1.7% below estimates, and Marketings at 102%, just below expectations of 103%.  The overall numbers were slightly friendly, trending below market expectations, which should help support prices today.  Total cattle on feed at 11.846 million head is still very large and the largest June 1 total on record.  The grain markets recovered on Friday, putting pressure on the feeder complex.  The cash market in feeders has been supportive, but on Friday, Feeder Cash Index values slipped 1.52 to 163.71, but was still 1.54 higher on the week.


Hog market calls are mixed as traders square positions for the Quarterly Hogs and Pigs report to be released on Wednesday, June 29.  The May Cold Storage report showed belly stocks at 56.4 million pounds, up 55% from a year ago, and pork supplies are the highest that they have been since April 2020.  Frozen pork supplies were up 2% from the previous month and up 17% from last year.  Friday carcass values close the day gaining 2.43 to 112.20 on a load count of 262 loads. Closing above $112.00, carcass values were firmer on the week overall.  The Lean Hog Index was .05 lower on Friday to 110.69, but finished the week 1.94 higher reflecting the cash market.  Hog futures rebounded strongly to end the week as price recovered most of Thursday’s losses, supported by the still strong tone in the cash market.


Matthew Strelow

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