TFM Sunrise Update 7-26-2022

Provided by Stewart-Peterson Inc.



Corn futures were up overnight with Sept corn up as much as 14 cents to 5.95 and Dec up 15-3/4 cents to 5.99-1/2.  Row crops gapped open higher overnight on talk of warmer and drier U.S. Midwest weather.  USDA rated the corn crop 61% G/E vs 64 last week.  44% of the crop yield potential is above trend, 27% trend and 19% below.  EU dry weather is pushing EU corn prices higher and increasing talk of higher imports.  Managed funds were net buyers of 11,000 corn in Monday’s trade.  They’re net long an estimated 117,000 contracts. .Crude is higher.  The U.S. dollar is higher.  Gold, silver, copper, coffee, cocoa, sugar and cotton are higher.  The market will watch U.S. consumer confidence today, Fed meeting Wednesday and GDP Thursday.  In the meantime, U.S. N plains and upper Midwest is dry. Rains are forecast in the Central Plains, Delta and SE.  The 6 to 10 day Midwest forecast is warm and dry.


The soybean complex was higher overnight.  August beans rallied 26 cents to 14.99.  Nov was up 28 cents to 13.81-3/4.  Aug meal gained 7.20 to 454.70.  August bean oil was up .89 to 60.90.  Futures gapped open higher overnight on talk of warmer and drier US Midwest weather.  USDA rated the soybean crop 59% G/E vs 61% last week.  Managed funds were net buyers of 10,000 soybeans and
8,000 soymeal and sold 2,000 soy oil on Monday.  They are now estimated to be net long 81,000 soybeans, 60,000 soymeal and 9,000 soy oil.  Dalian soybean, soymeal, palm oil and soy oil futures were higher.  Matif rapeseed futures lower.  Canada canola futures remain near season lows.

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Wheat futures stayed active overnight, moving higher at all three exchanges.  Sept Chicago wheat rallied 20 cents to 7.90.  Sept KC was up as much as 18-1/2 cents to an overnight high of 8.58-1/4.  Sept MPLS wheat advanced 19-3/4 cents to 9.03-3/4.  News of Russia bombing the Ukraine port in Mykolaiv region is being watched.  This is not one of the ports in the trade deal.  Ukraine is starting a key counteroffensive.  Headlines still suggest a Ukraine export deal still on, but the escalation of war adds doubt.  US wheat futures have had an inside day so far overnight.  Sept Chicago is up 38 cents from the recent low on talk of warmer and drier U.S. north plains weather.  USDA rated the U.S. spring wheat crop at 68% G/E vs 71 last week.  The annual U.S. spring wheat crop tour is this week.  USDA estimates U.S. 2022 spring wheat yield a record 51 BPA.  Matif wheat futures continue to trend higher.  French wheat prices are higher on increased export demand and talk of China buying.


Cattle calls are for steady to lower.  Cattle markets have seen good money flow recently, but the market may be concerned about the cash trade and looking at a seasonal top as the market moves closer to the first of August window.  Live cattle futures were mixed to start the week as the market digested last week’s Cattle on Feed and Cattle Inventory reports.  Feeder cattle saw selling pressure led by a strong move higher in grain markets.  Retail beef carcasses traded higher on Monday, closing with Choice .99 higher to 268.11 and Select adding 2.50 to 245.00.  Movement was light at 90 loads.  Strong surge higher in corn and wheat prices pressured some profit taking in the Feeder market.  Higher action in grains overnight will likely weigh on feeders today.  The Cash feeder index was down 1.99 to 169.02 and is trading at a near $10.00 discount to the August Futures, which could act as a limiting factor.


Hogs are called mixed.  The fundamentals in the cash and retail market are strong and keeping the buying strength alive in the hog market.  The market may start showing concern over the direction of cash in the near-term.  The current path is still higher as the market is looking for a near-term top.  The Lean Hog Index is trending higher, reflecting the overall cash market tone of the last week.  The index gained 1.18 to 118.22 on Monday.  August futures have pushed back to a discount under the the cash index, which could help support the front month.  Retail values have been a sign of the strength as demand has stayed strong overall.  Pork retail values were higher on Monday closing up 1.85 to 127.82.  Movement was light/moderate at 289 loads.  The strong demand tone will likely keep packers supporting bids for a tightening hog supply picture.


Matthew Strelow

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