TFM Sunrise Update 6-3-2022


Corn futures were unchanged overnight in light volume with little fresh news or outside market movement to inspire a big move one way, or the other.  July corn is fractionally higher this morning to 7.30-3/4.  For this holiday-shortened week, the contract is down 47 cents since last Friday’s close and is set up to mark the lowest weekly close in 2 months.  Improved U.S. Midwest weather has
triggered fund liquidation of long corn and short soybean positions.  This was a big trade after USDA March acreage report.  Dec corn is off a penny this morning at 6.93-1/4 and has lost 37 cents this week.  Due to the closed markets on Monday of this week, Weekly Export Sales will be out this morning at 7:30AM (CT).  Trade estimates are 125,000 to 400,000 tons for old crop, 100,000 to 300,000 tons for new crop.  U.S. central and south Plains and Midwest weather forecast calls for normal rains.  Argentina’s corn harvest  is 32 % with crop rated 15% Good-to-Excellent vs 49% last year.  A decision on Ukraine’s exports and USDA’s WASDE report next week will be key to prices.  Basis bids for corn shipped by barge to the U.S. Gulf Coast rose on Thursday as exporters tried to stay competitive with firming bids from domestic grain processors, traders said.


The soy complex was slightly lower overnight.  July beans fell 5-1/2 cents to 17.23-3/4. For the week, the contract is down 8-1/2 cents while trading close to Tuesday’s contract high of 17.49-1/4.  November beans are down 4-1/2 cents to 15.37-1/4 and are down 6-3/4 cents this week.  July meal is down .90 to 414.00, July soy oil is down .20 to 81.24.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 400,000 tons for old crop, 100,000 to 600,000 tons for new crop.  China is on holiday.  Malaysian palm oil is lower.  Underlying support stems from U.S. old crop soybean export buying, concern of lower U.S. acres and Managed fund liquidation of short soybean and long corn positions.  Argentina raised their soybean crop to 43.3 mmt vs 42.0.  In Brazil, farmer selling has increased.  Spot basis bids for soybeans rose at processors in the eastern half of the U.S. Midwest on Thursday, grain dealers said.  Dealers at processors west of the Mississippi River rolled their soybean bids to the August futures from July.

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Winter wheat futures were firm overnight while climbing back to their respective 50-day Moving Averages that were breached when prices tumbled to start the week.  July Chicago wheat is up a nickel to 10.63-1/4 this morning.  Last Friday, the contract settled up at 11.57-1/2.  July KC wheat is up 7 cents to 11.50-1/2 versus last Friday’s close at 12.35-1/4.  Trade estimates for this morning’s USDA Weekly Export Sales are (50,000) to 100,000 tons for old crop, 200,000 to 350,000 tons for new crop.  Spot basis bids for hard red winter wheat shipped by rail to export terminals at the U.S. Gulf fell on Thursday, grain dealers said.  Bids for HRW wheat delivered on the cash market to truck market terminals in Kansas and Oklahoma were unchanged.  Farmer sales were slow.  July MPLS Spring wheat futures are up 11 cents to 12.10-1/2 compared to last Friday’s close at 13.04-3/4. Everyone remains tuned in to Russia’s influence over Ukraine’s export potential.  This week Egypt and Algeria paid record high prices for wheat.


Cattle futures are called mixed to higher.  Managed money is exiting short cattle positions as charts encourage another round of technical buying. Prices are building a weekly bullish reversal if they can hold gains for the week today.  June Live cattle options expire on today, and first notice day is on Monday, adding to volatility.  Cash cattle trade is mostly complete for the week with $135 catching most trade, down $2 from last week.  Retail carcasses have been choppy this week, closing Thursday with Choice .77 lower to 266.65 and Select .72 firmer to 249.63.  The load count, at 131 has been moderate. Demand has stayed supportive as cattle carcass weights have dropped 21 pounds in the past three weeks.  The weaker overall tone in the grain market has triggered short covering as funds were caught short the feeder cattle market.  The money flow has turned more positive cattle markets, as a spring low looks to be in place. The length and height of the rally will be directed by the market fundamentals overall.


Hog futures are called steady to higher.  After a difficult start to the week, hog futures are trading slightly higher for the week and $4-5 off the early week lows.  Strong resistance over the top limited gains on Thursday, but prices, with the support of good fundamentals are looking to extend the rally.  The July hog contract started the session strong but ran into resistance at the 50-day moving average at $113.500.  That contract hasn’t traded over the 50-day since April 22, and this moving average has acted as a swing point.  The 100-day moving average is acting as support, but a break above the 50-day could open the market to challenge trend line resistance near $118.000.  The cash market has been supported under the hog futures.  Midday direct trade was .96 higher with the weighted average price at 113.85 on Thursday, and the 5-day average moved lower to 111.77.  The CME Lean Hog Index slipped .24 to 104.91.  The June contract is limited by its premium to the cash market, trading at $5.140 premium on Thursday.  Pork carcass values have been strong to start the week, and at midday on Thursday, carcass values surged 4.19 higher, and held most gains closing up 2.00 to 112.02. Movement was good at 153 loads. The CME Pork Cutout Index gained 0.37 to 107.84.  Product movement has been good recently, and the USDA will release export sales numbers this morning before the market open.


Matthew Strelow

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