Cattle industry groups are offering a mixed response to the Senate Ag Committee’s passage of the Cattle Price Transparency Act of 2022 and the Meat and Poultry Special Investigator Act. In a statement, the National Cattlemen’s Beef Association said the heavy-handed mandates will stifle innovation and limit marketing opportunities in the cattle industry. The U.S. Cattlemen’s Association said a vote against the bills are a vote for the status quo and members cannot wait for another calf cycle to get significant market return.

CORN

ANALYSIS

Corn closed the week $.66 1/2 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. corn exports, for the week ended 6/23/22, were 49.1 million bushels, up from the previous week’s 46.9 mil bu, last year’s same-week exports of 41.1 mil bu and were the highest in three weeks. The average weekly export pace that is needed to reach the USDA forecast is now 29.8 million bushels/week, which would be moderately below last year’s 35.4 million/week average over the final 10 weeks of the marketing year. Cumulative export inspections of 1.867 billion bushels are still down 17% from last year’s 2.246 billion.

In the weekly crop progress and conditions report; US national corn was rated 67% g/e down 3% from last week, vs expectations of 69% vs. 62% last year. Iowa lost 3% to 80% g/e, with Illinois down 1% o 70%, Indiana fell 11% to 59% with Missouri down 1% to 69%, Minnesota down 1% to 64% and Nebraska down 4% to 82%.

In the weekly EIA report; U.S. ethanol production, for the week ended 6/24/22, slipped to 1.051 million barrels/day from 1.055 mbpd the week prior, with the latest week’s production being 0.7% below last year’s 1.058 mbpd. Over the last 11 weeks, U.S. ethanol production has averaged 1.013 mbpd, well below the roughly 1.061 mbpd average that is needed through the end of August in order to reach the USDA’s 5.375 billion bushel corn for ethanol usage estimate. U.S. ethanol stocks last week fell to 22.746 mil barrels from 23.476 mil barrels the previous week, with the 31 million gallon decline being the largest in four weeks and 2nd largest decline of the last 20 weeks.

In the quarterly stocks and acreage report; corn stocks were estimated at 4.346 bb vs. 4.345 bb estimated with US corn acres at 89.921 ma vs. 89.5 ma in March and 89.8 ma estimated. Minnesota corn acres were up 500,000 from March, 600,000 fewer acres in North Dakota and 300,000 fewer in South Dakota. Assuming trendline yields, the market is likely trading a 1.425 bb corn carryout.

STRATEGY & OUTLOOK

Hot and dry weather in July is needed to push values higher. Futures have free fallen after technical support was broken and fund liquidation has pressured values.

SOYBEANS

ANALYSIS

Soybeans closed the week $.29 1/2 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. soybean exports last week were 17.2 mil bu, nearly unchanged from the previous week’s 15.7 mil bu but continuing to run sharply above year ago levels which saw exports this week of only 4.1 mil bu. Over the last five weeks, though, soybean exports averaged 16.7 million bushels/week, with a high of 22.3 million, well below the roughly 23.9 million/week average that will be needed over the final 10 weeks of the marketing year in order to reach the USDA’s 2.170 billion bushel export projection as prospects of 2021/22 exports falling short of the USDA’s annual estimate are increasing. Cumulative soybean export inspections of 1.888 billion bushels are down 10.4% from last year’s 2.108 billion.

In the weekly crop progress and conditions report; Soybean conditions fell to 65% g/e, down 3% from last week vs. expectations of 67% g/e and 60% last week. Iowa was unchanged at 80%, Illinois was also unchanged at 66%, Indiana down 9% to 61% while Missouri lost 1% to 59%, Minneapolis down 3% to 61%, Nebraska down 6% to 62% and North Dakota up 5% to 67%.

In the quarterly stocks and acreage report, the USDA forecast quarterly soybean stocks at 971 mb vs. 954 mb est with acres at at 88.325 ma vs. 91.0 ma in March and 90.6 ma estimated. Minnesota soybean acres were down 500,000 from March and North Dakota acres are down 1.1 million. Assuming trendline yields, the market is likely trading a carryout near 145 mb, leaving little room for error this growing season.

STRATEGY & OUTLOOK

Futures rallied and failed at major weekly resistance and are now approaching key technical support. Tight stocks suggest the market will be very sensitive to weather issues.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.96 lower; Kansas City wheat closed $.90 1/4 lower and Minneapolis wheat $1.22 1/2 lower. Last week, Egypt bought 815,000 mts of wheat, the largest single purchase in 13 years. The wheat was purchased from Romania, Bulgaria, France and Russia.

In the weekly export inspections report; U.S. wheat exports last week were 12.9 mil bu, nearly unchanged from the previous week’s 12.8 mil bu and slightly above last year’s same-week exports of 10.7 mil bu. Through the first three full weeks of the 2022/23 marketing year, cumulative export inspections of 49 million bushels are down 13% from last year’s 57 million, leaving weekly shipments needing to average roughly 13.7 million bushels over the course of the marketing year in order to reach the USDA’s 775 million bushel export projection vs last year’s 14.0 million/week average from this point forward.

In the weekly crop progress and conditions report; Spring wheat conditions were 59% g/e, unchanged from last week vs. expectations of 60% vs. 20% g/e last year. Minnesota was unchanged at 64%, North Dakota was 2% lower at 69%, South Dakota up 2% to 68% and Montana was up 3% to 28% g/e. Winter wheat advanced to 41% harvested, up from 25% last week vs. 41% expected. The average harvest pace is 35% g/e. Missouri is 65% harvested, Kansas 59%, Oklahoma 90% and Texas is 80% harvested.

In the quarterly stocks and acreage report, the USDA forecast US wheat stocks at 660 mb vs. 655 mb estimated and All wheat acres at 47.1 m; down from 47.35 in March but above estimates of 47.1 million. Spring wheat acres came in at 11.11 million vs. estimates of 10.844 ma but down from March USDA of 11.2 ma. The USDA has North Dakota spring wheat acres increasing by 200,000 with Montana down 300,000 while Texas winter wheat acres are down 100,000 from March.

STRATEGY & OUTLOOK

US wheat is not competitively priced on the world export markets and during harvest, the supply increase should pressure values to find a price level that will stimulate demand.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $1.27 higher while feeder cattle closed $1.62 higher.

Last week, there was moderate fed cattle cash trade in the North at mostly $144 to $151/cwt live and $230 to $238 dressed. That is mostly steady with last week. Light volumes traded in the South at mostly $137 to $138 live – steady with the previous week.

Last week; the FCE had 1,167 head offered for sale and 35 cattle sold at $138/cwt.

The latest USDA steer carcass weights were steady with last week at 879 pounds, which also even with last year.

This week’s net beef sales for 2022 were 17,000 mts with shipments of 19,800 mts.

STRATEGY & OUTLOOK

Producers should have window or fence strategies to protect the downside but allow for upside potential. A struggling economy looks to cap rallies in 2022. Commercials have turned bullish.

LEAN HOGS

ANALYSIS

Lean hogs closed the week $3.92 lower.

The quarterly USDA Hog and Pig report is considered slightly friendly. The USDA reported all hogs at 99.1% vs estimates of 99.3%, kept for breeding at 99.2% vs. estimates of 98.9% and kept for marketing at 99.1% vs. estimates of 99.3%.

Iowa/S. Minnesota weekly hog weights for week ending June 25 has weights at 280.6 pounds vs. 283.6 pounds last week and 276.9 pounds last year.

This week’s net pork sales were 2022 of 32,300 mts with shipments of 27,700 mts.

STRATEGY & OUTLOOK

The hog market has bounced off long term technical support just as commercials turned bullish and funds are covering short positions