Market Snapshot | January 27, 2022

Corn futures are steady to 4 cents lower and trading in narrow ranges at midmorning.

• Corn futures fell under corrective pressure following yesterday’s close near a nine-month high and spillover from continued weakness in wheat and a surging U.S. dollar.
• UDSA reported net 2021-22 U.S. corn sales of 1.402 MMT for the week ended Jan. 20, up 29% from the previous week and up 84% from the average for the previous four weeks. Sales topped trade expectations ranging 600,000 MT to 1.2 MMT.
• Weekly exports totaling 1.437 MMT, a marketing-year high, were up 11% from the previous week and up 36% from the prior four-week average.
• Crop stress in South America remains concerning even with rains providing some relief this week. Parts of Paraguay and Brazil’s Rio Grande do Sul state received another round of rain yesterday, “but coverage of significant rain was poor leaving many areas in need of greater rain,” the forecaster said.
• March corn is trading within yesterday’s range after ending yesterday at $6.27, the contract’s highest close since $6.40 on May 7. The seven-month intraday high of $6.31, reached Tuesday, marks initial resistance. Initial support is seen at the 10-day moving average of $6.11 1/4 and this week’s low of $6.09 1/2.

Soy complex futures are higher after erasing early declines; with nearby soybeans and soyoil posting contract highs and soymeal rising to highs for the week.

• March soybeans reached a contract high and March soyoil also posted a contract high in the wake of Malaysian palm oil’s climb to record levels.
• Net weekly U.S. soybeans sales for 2021-22 totaled 1.026 MMT, up 53% from the previous week and up 77% from the prior four-week average. Sales expectations ranged from 500,000 MT to 1.3 MMT. Lead buyers included China (540,200 MT, including 132,000 MT switched from unknown destinations and decreases of 2,600 MT) and Mexico (345,300 MT, including decreases of 67,200 MT).
• Recent rain in Rio Grande do Sul “has not been enough to significantly improve soil moisture in the drier areas in the west and stress to crops and declines in yields will increase until rain returns Feb. 3,” World Weather said today.
• In Argentina, a drier weather pattern will settle in the next two weeks and fieldwork should increase around occasional rain. Most crops “should develop in a favorable environment after recent rain increased soil moisture,” World Weather said.
• March soybean futures reached a contract high at $14.50 3/4, topping the previous high of $14.45 1/2 set in May. The continuation chart implies additional resistance around $14.66 and $14.80, and a push above those levels would have bulls targeting $15.00. Initial support is seen around $14.00.

Wheat futures are lower, led by declines of around 12 cents in nearby SRW contracts and 10 cents in HRW.

• Wheat futures extended yesterday’s declines amid profit-taking pressure after escalating Russia-Ukraine tensions sent prices to the highest levels since at least late December.
• The U.S. dollar’s climb to 19-month highs also added pressure, overshadowing stronger than expected export numbers.
• Net weekly U.S. wheat sales totaled 676,700 MT for 2021-22, a marketing-year high and a jump of 78% from the previous week. Net sales of 60,000 MT were reported for 2022-23. Weekly sales for 2021-22 were expected to rise 200,000 to 600,000 MT.
• March SRW wheat fell as low as $7.74, the lowest intraday price since $7.69 1/2 on Jan. 19. The contract found support around the 100-day moving average about 1/4 cent under today’s low. Further support is pegged at the 200-day moving average of $7.41 and the January low of $7.35 1/2.

Cattle futures are mostly mildly lower at midmorning.

• Live cattle futures are under mild pressure following yesterday’s corrective bounce as traders watch for cues from cash and wholesale beef markets. Corn market strength this week has feeders under pressure.
• USDA reported live steers averaging just under $137.00 at mid-week, steady to weaker with last week’s trade. Most feedlots are seeking higher prices, but packers will likely be reluctant to raise bids.
• Choice cutout values fell $2.92 yesterday to $289.46, the lowest since Jan. 17, but movement was relatively strong at 132 loads.
• Net weekly beef sales totaled 14,300 MT for 2022, primarily for South Korea (6,200 MT, including decreases of 400 MT) and Japan (3,900 MT, including decreases of 500 MT).
• April live cattle are trading within yesterday’s range. Initial resistance is market by yesterday’s high and low at $142.225 and $140.475, respectively.

Lean hog futures are sharply lower as the market extended yesterday’s drop.

• Hog futures are under continuing corrective pressure after posting a series of contract highs over the past week. The surging U.S. dollar index is helping pressure the market.
• With this morning’s sharp losses, the market is no longer overbought.
• The CME lean hog index is up 75 cents at $79.20, the highest since Nov. 8. Pork cutout values rose $2.14 yesterday to $94.60, led by a jump of over $10 in hams. Movement totaled about 314 loads.
• Net weekly pork sales totaled 49,100 MT for 2022, led by Mexico (17,300 MT, including decreases of 300 MT), China (16,900 MT, including decreases of 200 MT) and Canada (3,000 MT, including decreases of 500 MT).
• April lean hogs fell as low as $94.00 after reaching a contract high yesterday at $97.50.