Market Snapshot | February 10, 2022

Corn futures are 7 to 12 cents higher in old-crop contracts at midmorning.

• Corn futures jumped to contract highs for the second day in a row as spillover from a rally in soybeans overshadowed lackluster export sales.
• The shrinking South American production outlook also continued to support prices. Conab, Brazil’s forecasting agency, cut its Brazilian corn crop estimate by 559,000 MT from last month to 112.3 MMT and also lowered projected 2021-22 corn exports by 1.7 MMT to 35 MMT.
• USDA reported net U.S. corn export sales of 589,100 MT for the week ended Feb. 3, down 50% from the previous week and down 43% from the average for the previous four weeks. Sales were at the low end of expectations ranging from 500,000 to 900,000 MT in the 2021-22 marketing year.
• Corn export commitments so far in 2021-22 are running 21% behind year-ago levels, compared to 20% last week.
• March corn futures rose as high as $6.62 3/4, a contract high and the highest intraday price for nearby futures since the market hit $7.50 1/2 last July. December futures hit a contract high at $5.98 1/2.

Soy complex futures are broadly higher, with soybeans up 18 to 20 cents but well off earlier highs, nearby soymeal up $6 to $8 and nearby soyoil is up over 100 points.

• Nearby soybean futures extended a sharp two-week rally to hit the highest levels since last June on expectations smaller South American production will push more export business to the U.S.
• Conab slashed its official Brazilian soybean crop estimate by 15 MMT from last month to 125.5 MMT, citing drought in the southern region of the country and part of Mato Grosso do Sul state. Conab also lowered its 2021-22 soybean export forecast for Brazil by 9.1 MMT to 80.2 MMT.
• China and “unknown destinations” have stepped up U.S. soybean purchases recently as South American crop prospects deteriorated. USDA reported daily soybean sales of 299,700 MT to “unknown destinations,” including 233,700 MT for delivery during the 2021-22 marketing year and 66,000 MT during the 2022-23 marketing year.
• Since Jan. 28, USDA has reported a combined 2.96 MMT of soybean sales to China or “unknown destinations.” Over the month prior to Jan. 28, sales to China and unknown destinations totaled just 648,000 MT.
• Net weekly U.S. soybean sales totaled 1.596 MMT, up 46% from the previous week and up 81% from the four-week average. Expectations ranged from 900,000 MT to 1.5 MMT. Soybean export commitments are still running at 21% behind year-ago levels.
• March soybeans rose as high as $16.33, surpassing the previous contract high set yesterday to reach the highest intraday price for a nearby contract since $16.57 last May. November soybeans notched a contract high at $14.69 3/4.

Wheat futures are mixed, with spring wheat up 5 to 9 cents, SRW up 2 to 3 cents and HRW narrowly mixed.

• SRW wheat futures rose to a two-week high and spring wheat hit a five-week high behind spillover support from corn and soybeans and ongoing concerns over tight global supplies of milling wheat.
• Net weekly U.S. wheat sales for 2021-22 totaled 84,800 MT, up 48% from the previous week but down 75% from the prior four-week average. Sales of 48,400 MT were reported for 2022-23. Exports of 380,900 MT were down 1% from the previous week but up 9% from the four-week average.
• Sales expectations ranged from 100,000 to 400,000 MT for 2021-22 and 25,000 to 300,000 MT for 2022-23. Wheat export commitments are running 24% behind a year ago levels, versus 23% last week. 
• U.S. winter wheat ground considered in drought conditions increased two points to 71% for the week that ended Feb. 8, according to the U.S. Drought Monitor. Among top HRW states, Kansas had a three-point decrease in the area considered abnormally dry or in drought to 86%, while Nebraska had a six-point increase to 98%.
• March SRW wheat reached $8.01 3/4, the contract’s highest intraday price since $8.17 1/2 on Jan. 26.

Live and feeder cattle futures are mostly higher at midmorning.

• Live cattle futures posted contract highs for the second straight day on technical strength and signs of improved beef demand, while surging corn prices limited buying in feeder cattle.
• Meatpackers continue to step up slaughter rates and are reportedly bidding around $140.00 for cattle in some Plains markets. Live steers averaged $140.07 through yesterday morning, up from last week’s average of $139.76, according to USDA reports.
• Choice cutout values fell $1.67 yesterday to $275.79, the lowest daily average since Jan. 7, but movement was solid at 132 loads.
• USDA reported net U.S. beef sales for the week ended Feb. 3 at 19,500 MT for 2022, down 3% from the previous week and down 63% from the average for the previous four weeks.
• April live cattle reached a contract high at $148.70, topping the previous high of $147.925 set yesterday. March feeders touched $168.975, a five-week high.

Deferred lean hog futures are sharply higher.

• Hog futures posted contract highs for the fourth consecutive session behind bullish technicals, firmer cash fundamentals and an outlook for tighter supplies.
• The CME lean hog index rose 60 cents to $87.22, the highest since Oct. 14.
• Wholesale pork market extended recent strength, with cutout values jumping $7.55 yesterday to $104.84, the highest daily average since Oct. 14. But movement was light at 286 loads.
• Net weekly U.S. pork sales of 18,100 MT for 2022 were down 40% from the previous week and down 71% from the prior four-week average. 
• April lean hog futures reached a contract high at $107.70 while nearby February reached $90.85, a four-month high for nearby futures.