Market Snapshot | January 31, 2022

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Old-crop corn futures are 5 to 9 cents lower at midmorning after rising to contract highs overnight.

  • Corn futures tumbled on profit-taking and spillover from slumping the wheat market after prices rose to contract highs overnight.
  • March corn overnight hit at contract high at $6.42 1/2, surpassing the previous contract high at $6.40 1/2 posted in May, before falling as low as $6.22 3/4.
  • USDA reported 1.036 MMT (40.8 million bu.) of corn inspected for export during the week ended Jan. 27, down from 1.186 MMT the previous week. Expectations ranged from 950,000 MT to 1.4 MMT.
  • Large speculators increased their bullish bets in the corn market in late January, the Commodity Futures Trading Commission’s weekly Commitments of Traders report showed. The managed money net long rose 39,082 contracts during the week ended Jan. 25 to 365,605 contracts.
  • Corn futures remain in a strong uptrend but today’s chart action suggests the market may be reaching a point of exhaustion and could be see further long liquidation. Initial support is seen at the 10- and 20-day moving averages of $6.18 3/4 and $6.09, respectively.

Soy complex futures are mixed, with soybeans up 13 to 16 cents but down from overnight highs; soymeal is up around $5 to $6 in nearby contracts and soyoil is down around 30 points.

  • Soybean futures trimmed gains after surging overnight to contract highs for the third straight day. Fresh export business, along with reduced crop prospects in South America and a record rally in Malaysian palm oil, helped the market extend last week’s rally.
  • USDA reported daily soybean sales of 129,000 MT for delivery to China -- 66,000 MT is for delivery during the 2021-22 marketing year and 63,000 MT is for delivery in 2022-23.
  • Today’s announcement follows soybean sales reported Friday for 141,514 MT to Mexico and 251,500 MT to “unknown destinations,” both during the 2021-22 marketing year. USDA also reported a sale of 264,000 MT of soybeans to China during 2022-23 last Friday.
  • Also today, USDA reported 1.411 MMT (51.7 million bu.) of soybeans inspected for export during the week ended Jan. 27, up from 1.35 MMT the previous week. Expectations ranged from 800,000 MT to 1.45 MMT.
  • Brazil-based consultancy AgRural slashed its projection for the country’s soybean crop by 4.9 MMT to 128.5 MMT, citing drought in the southern states and Mato Grosso do Sul and excess rain in Mato Grosso. AgRural forecasts the smallest Brazilian soybean yield since 2015-16.
  • March soybeans overnight reached $14.96 3/4 after surging 55 3/4 cents last week. Bulls are likely targeting psychological resistance at $15.00.

Wheat futures are down sharply, led by declines of 14 to 17 cents in HRW and SRW contracts.

  • SRW futures sank near two-week lows under corrective pressure following sharp gains in recent weeks. Prices rose overnight amid ongoing concern a Russian invasion of Ukraine may disrupt the global wheat trade.
  • USDA reported 361,375 MT (13.3 million bu.) of wheat inspected for export during the week ended Jan. 27, down from 400,973 MT the previous week. Expectations ranged from 300,000 to 500,000 MT.
  • Russian wheat export prices fell for a third week running last week, with the ruble still weak against the dollar amid tensions between Moscow and the West over Ukraine.
  • Russian wheat with 12.5% protein content loading from Black Sea ports for supply in March was $325 per MT free on board (FOB) last week, down $1 from the previous week, the IKAR agriculture consultancy said. SovEcon, another consultancy, pegged wheat $1 down at $330 per MT.
  • Sovecon raised its forecast for Russia’s wheat exports by 200,000 MT to 34.3 MMT in the 2021-22 marketing season.
  • March SRW wheat fell as low as $7.63, the contract’s lowest intraday price since $7.41 1/4 on Jan. 18. March HRW fell as low as $7.82 1/4, the lowest price since Jan. 19.

Cattle futures are moderately to sharply higher at midmorning, led by feeders.

  • Feeder cattle are being supported by weakness in the corn market.
  • Live cattle futures extended last week’s strong finish, as firmer technicals helped push April futures to a four-week high. Feeder futures gained support from a sell-off in the corn market.
  • Last week’s slaughter was an estimated 643,000 head, up 1.1% over last week and 2.0% under the same week in 2021, indicating recent Covid-driven packing industry slowdowns may be fading.
  • USDA’s semi-annual U.S. Cattle Inventory Report after the close today is expected to show the U.S. cattle herd as of Jan. 1 contracted 1.2% from year-ago, based on an Urner Barry survey.
  • The beef cow inventory and the number of beef replacement heifers are both expected to be down 1.8%, which would signal the beef herd will continue to contract. The 2021 calf crop is expected to be down 0.9% from the previous year.
  • Choice cutout values ended last week at $290.42, down from $292.41 at the end of the previous week. Movement was light at 77 loads. Live steers last week averaged $136.93 as of Friday morning, down from $137.50 the previous week.

Lean hog futures are slightly to moderately firmer.

 

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