Market Snapshot | February 14, 2022
Corn futures are around 4 cents lower at midmorning.
- Corn futures extended overnight declines on spillover pressure from slumping soybeans. Speculators hold a large net long position in corn, making the market vulnerable to fund-driven selling if upside momentum fades.
- Paraguay and Brazil’s Parana, Santa Catarina and Rio Grande do Sul states “will see a restricted rainfall pattern through Saturday and fieldwork should advance well while immature crops in the drier areas see rising levels of crop stress,” World Weather Inc. said today.
- “Most of the remainder of Brazil will see regular rain during the next 10 days that will be supportive of crop development while slowing fieldwork,” World Weather said.
- USDA reported 1.455 MMT (57.3 million bu.) of corn inspected for export during the week ended Feb. 10, up from 1.065 MMT the previous week. Expectations ranged from 950,000 to 1.4 MMT.
- March corn futures fell as low as $6.42 1/2 after rallying 30 cents last week to end Friday at $6.51, the highest settlement for a nearby contract since mid-July.
- Bulls this week likely will target the contract high at $6.62 3/4 reached Feb. 10. Initial support comes in around Friday’s low at $6.37 3/4 and the 10-day moving average at $6.34 1/2.
Soy complex futures are broadly lower, led by declines of more than $9 in nearby soymeal and 19 to 21 cents in soybeans; soyoil is around 30 points lower in nearby contracts.
- March soybeans fell to the lowest levels in over a week on corrective selling and profit-taking following last week’s rally to nine-month highs. Early-week price action will be watched closely for signs the market may have established a near-term top last week.
- USDA reported 1.155 MMT (42.4 million bu.) of soybeans inspected for export during the week ended Feb. 10, down from 1.24 MMT the previous week. Expectations ranged from 1.0 to 1.5 MMT.
- Drought continues to reduce South American production. Emater, a Brazil-based analyst, cut its forecast for Rio Grande do Sul’s soybean crop by 44% to 11.2 MMT, down from 19.9 MMT in an earlier projection.
- Large speculators increased their bullish bets in the soybean market in early February to the highest level since May, according to the Commodity Futures Trading Commission’s Commitments of Traders report.
- The managed money net long in soybean futures and options increased 11,827 contracts to 166,315 contracts for the week ended Feb. 8, the highest since the week ended May 11.
- Malaysian palm oil futures jumped to a record high after India cut its tax on crude palm oil imports to 5% from 7.5% in an effort to subdue soaring local prices.
- March soybean futures pushed under the 10-day moving average and fell as low as $15.51 1/2, the contract’s lowest price since $15.32 on Feb. 4. Initial support is seen around $15.26, the Feb. 2 intraday low. Upside targets for bulls include the contract high of $16.33.
Winter wheat futures are lower, led by declines of 3 to 4 cents in SRW contracts. Spring wheat futures have turned mostly firmer after a weak start.
- Winter wheat futures faded to losses on technical selling and spillover from soybean weakness after rising overnight near three-week highs. Signs of easing Russia/Ukraine tensions may also be weighing on prices.
- USDA reported 435,188 MT (16.0 million bu.) of wheat inspected for export during the week ended Feb. 10, up from 433,921 MT the previous week. Expectations ranged from 200,000 to 550,000 MT.
- Managed money’s net short in SRW wheat increased 3,100 contracts during the week ended Feb. 8 to 29,552 futures and options contracts, the largest since July 2020, according to CFTC data.
- China sold 520,183 MT of state-owned wheat reserves at last week’s auction, 99.3% of the volume put up for sale, at an average sales price of 2,590 yuan ($407) per metric ton. China continues to sell nearly all of the state-owned wheat put up for sale, though prices are down from recent weeks.
- Taiwan tendered to buy 54,920 MT of U.S. milling wheat.
- March SRW wheat overnight reached $8.13 1/2, the highest intraday price since $8.17 1/2 on Jan. 26, before turning lower. The lead contract gained 34 1/2 cents last week.
Cattle futures are firmer at mid-morning after recovering from initial weakness.
- Live cattle futures fell earlier on followthrough pressure from a weak close Friday before finding buying interest around last week’s lows. Recent cash market strength is underpinning futures.
- Cash cattle trade probably won’t establish direction until around mid-week. But with packers boosting slaughter in recent weeks and fed cattle supplies near seasonal lows, cash prices could stay firm over the short term.
- Live steers averaged $140.35 last week through Friday morning, up from the previous week’s average of $139.76. Choice cutout values fell 30 cents Friday to $274.52, a five-week low.
- April live cattle futures fell as low as $145.275, the lowest intraday price since $145.225 on Feb. 8.
Lean hog futures are mostly higher after rebounding from early declines.
- Hog futures were under pressure early from followthrough pressure from losses late last week, but declines are being limited by strong cash fundamentals.
- Cash market fundamentals remain supportive. Pork cutout values soared $8.48 Friday to a four-month high at $109.96, led by a gain of over $22 in hams. Movement totaled about 282 loads.
- The CME lean hog index is up $1.18 to $88.92, the highest since Oct. 12.
- April lean hog futures fell as low as $101.00, the lowest intraday price since $100.875 on Feb. 8, before rebounding. February lean hogs, which expire today and settle against the cash index Wednesday, hold a premium of about $2.55 premium to today’s cash index quote.