Market Snapshot | February 28, 2022

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Corn futures are sharply lower at midmorning, led by gains of 31 to 32 cents in old-crop contracts.

Soy complex futures are sharply higher, with nearby soybeans up 47 to 48 cents, nearby soymeal up nearly $8 and nearby soyoil up over 200 points.

  • Soybean futures rebounded from sharp declines Friday as wheat futures rallied on the Russia/Ukraine conflict. Ukraine is the world’s largest producer and exporter of sunflower seeds and sunflower oil, a competitor to soybean oil.
  • USDA reported daily soybean sales of 120,000 MT to “unknown destinations” during the 2021-22 marketing year and 136,000 MT for delivery to China during 2022-23.
  • Today’s sales added to a four-week string of purchases. Since Jan. 28, USDA has reported a combined 4.67 MMT of soybean sales to China or unknown destinations, a seven-fold increase from the pace over the previous month.
  • USDA reported 735,278 MT (27 million bu.) of soybeans inspected for export during the week ended Feb. 24, down from 1.043 MMT the previous week. Expectations ranged from 500,000 MT to 1.1 MMT.
  • Large speculators increased their bullish bets in the soybean market for the fifth straight week, according to the CFTC’s Commitments of Traders report. The managed money net long in soybean futures and options increased 4,962 contracts to 180,334 contracts for the week ended Feb. 22, the highest since the week ended May 11.
  • Wheat futures and speculative money flow will drive soy complex direction this week. Nearby soybeans pulled back sharply after briefly pushing above $17.00 last week, which suggests the market has reached an exhaustion point.

Wheat futures are sharply higher, with nearby HRW and SRW contracts soaring over 45 cents.

Cattle futures are mostly lower at midmorning, with live cattle near one-month lows.

  • Live cattle futures extended last week’s declines amid wholesale beef market weakness and signs the market established a near-term top.
  • Feeder cattle futures sank to the lowest levels since mid-November as corn prices rallied.
  • USDA’s Cattle on Feed Report released after the close Friday was largely price-neutral, meaning market focus will center on money flow, technicals and outside markets. USDA estimated 1.999 million head of cattle were sent to feedlots during January, down 1.2% from the same month in 2021 and larger than expectations for a decline of about 0.8%.
  • Concerns over spring demand are weighing on futures despite cash cattle strength. Live steers last week averaged around $143.40, up from $142.36 last week.
  • Choice cutout values fell 97 cents Friday to $258.27, down $7.58 for the week and near an 11-month low.
  • April live cattle fell as low as $140.925, the lowest intraday price since $140.475 on Jan. 26. A weak close today may prompt bears to target the January low at $139.025. The February live cattle contract expires today.

Lean hog futures are mixed, with the nearby April contract lower and deferreds higher.

 

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