Market Snapshot | February 17, 2022

Nearby corn futures are narrowly mixed at midmorning after fading from earlier gains.

• Corn futures erased overnight gains on mild profit-taking pressure after weekly export numbers matched expectations and soybeans tumbled. Markets continue to receive mixed signals on the Russia/Ukraine standoff.
• USDA reported net 2021-22 U.S. corn sales of 820,000 MT during the week ended Feb. 10, up 39% from the previous week but down 23% from the average for the previous four weeks. For 2022-23, net sales totaled 113,500 MT. The sales numbers were within trade expectations ranging from 500,000 to 1 MMT for 2021-22 and zero to 250,000 MT in the 2022-23 marketing year.
• The International Grains Council (IGC) lowered its forecast for 2021-22 global corn production, partly on diminished outlooks for Brazil and Argentina. In its monthly update, IGC cut the forecast by 4 MMT to 1.203 billion MT.
• March corn futures reached $6.52 overnight before fading. Upside technical momentum has stalled since March notched a contract high at $6.42 3/4 on Feb. 11.
• The 10-day moving average at $6.41 1/4 marks initial support for March corn, followed by this week’s low of $6.35 1/2.

Soy complex futures are mixed, with nearby soybeans up 2 to 3 cents; nearby soymeal is marginally lower and nearby soyoil is down around 20 points.

• Soybean futures faded on corrective selling after rising to highs for the week overnight. Export business and a reduced South American harvest outlook continued to underpin prices.
• In Brazil’s Santa Catarina and Rio Grande do Sul states, warm to hot temperatures will continue through next week, increasing crop stress, but cooler temperatures and rain late next week should bring relief, World Weather Inc. said today. “Next week’s rain will be important in increasing soil moisture for winter crops as well as for summer crops that are still viable, while some crops have been damaged too seriously to benefit from the rain,” World Weather said.
• Concern over Southern America’s crop stirred a recent buying spree from global importers. USDA reported daily soybean sales of 120,000 MT to unknown destinations for 2021-22. Since Jan. 28, USDA has reported a combined 3.32 MMT of soybean sales to China or unknown destinations.
• Net weekly U.S. soybean sales of 1.362 MMT for 2021-22 were down 15% from the previous week but up 26% from the prior four-week average. Top buyers included “unknown destinations” (371,700 MT) and China (224,500 MT, including decreases of 2,300 MT). For 2022-23, net weekly sales totaled 1.526 MMT, including 876,000 MT for China. Sales were within trade expectations ranging from 750,000 MT to 1.8 MMT for 2021-22 and 800,000 MT to 1.5 MMT for 2022-23.
• March soybeans fell from an overnight high at $16.06, the highest intraday price since the contract high of $16.33 on Feb. 10. The lead contract held support at the 10-day moving average around $15.74 1/2 and has further support at this week’s low of $15.42 1/4.

Wheat futures are higher, led by gains of 12 to 14 cents in nearby SRW contracts.

• Wheat futures are higher amid ongoing concerns a potential Russian invasion of Ukraine could disrupt the global trade, though the market has been receiving mixed signals on Russia’s intent.
• Net weekly wheat sales of 118,100 MT for 2021-22 were up 39% from the previous week but down 61% from the prior four-week average. For 2022-23, net sales totaled 10,500 MT. Old-crop sales were at the low end of trade expectations ranging from 75,000 to 500,000 MT.
• The amount of winter wheat considered in drought conditions increased one point to 72% for the week that ended on Feb. 15, according to the U.S. Drought Monitor.
• IGC left its forecast for global wheat production in 2021-22 unchanged at 781 MMT, slightly above 774 MMT in 2020-21.
• Japan purchased 54,692 MT of U.S. milling wheat in its weekly tender. Algeria bought at least 300,000 MT of optional origin milling wheat. Egypt purchased 180,000 MT of Romanian wheat from Wednesday’s tender.
• March SRW futures rose as high as $7.99 1/4 but remains within the past week’s range. Bulls are likely targeting this week’s high of $8.01 1/2, while key downside targets for bears include this week’s low at $7.73.

Cattle futures are mostly lower at mid-morning.

• Live cattle futures are under mild corrective pressure and trading in narrow ranges as traders await further developments in cash markets. Slumping wholesale beef prices are contributing to the weaker tone.
• Cash cattle trading has been quiet so far this week, with unconfirmed talk of $142 trade in Kansas and feedlots asking $142 to $143 for showlist supplies in the Southern Plains, up from last week’s $140.48 average.
• Packers continue to lower wholesale beef prices to move product. Choice cutout values dropped 75 cents yesterday to $269.62, the lowest since Jan. 6. Movement totaled 111 loads.
• USDA reported net weekly U.S. beef sales of 23,000 MT for 2022, up 18% from the previous week and up 38% from the prior four-week average.
• Chart levels to watch in April live cattle include this week’s high at $147.70 and the contract high of $148.70 reached Feb. 10. Initial support is seen at yesterday’s low at $146.175 and at this week’s low of $145.275.

Lean hog futures are slightly higher.

• Hog futures rose a four consecutive day amid continued cash market strength, though the market is also oversold and vulnerable to corrective selling.
• The CME lean hog index is up another $1.50 today to $93.34, the highest since early October, and has surged $21.50 since the beginning of the year.
• The index maintained a roughly $10 to $12 premium over year-ago through January, but that has extended to nearly $17, as slaughter data signals hog supplies are down even more than USDA estimates indicate.
• Pork cutout values fell 20 cents yesterday to $106.52 but are still near a four-month high reached Feb. 11. Movement was relatively light at 231 loads.
• Net weekly pork export sales of 18,300 MT for 2022 were up 1% from the previous week but down 46% from the prior four-week average.
• Key upside targets in April lean hogs include the contract high of $107.70 posted Feb. 10. Support is seen at the Feb. 14 low of $101.00.