Market Snapshot | May 3, 2022

Corn futures are lower at midmorning after fading from overnight gains, with nearby contracts down 8 to 10 cents.

• Nearby corn futures are under profit-taking pressure following overnight gains driven in part by slower-than-expected planting progress. Conditions for fieldwork are expected to improve next week.
• Today’s forecast includes less rain for the eastern Corn Belt starting this weekend and warmer temperatures and faster drying rates next week, World Weather Inc. said today. “Planting should quickly increase once the ground firms up after daily rain into Friday,” the forecaster said.
• USDA late Monday reported 14% of the U.S. corn crop was planted as of Sunday, up from 7% a week earlier but well below the 33% average for the previous five years. Progress fell short of expectations for 16% planted, based on a Reuters survey.
• Crop Consultant Dr. Michael Cordonnier estimated 35% to 50% of Brazil’s safrinha corn crop is facing some level of moisture stress, prompting him to cut his Brazilian corn crop forecast by 5 MMT to 107 MMT. USDA currently projects Brazil’s 2021-22 corn crop at 116 MMT.
• Ukraine is forecast to have a significant shortage of grain storage facilities for this year’s crops due to a sharp decline in exports resulting from Russia’s invasion, analyst APK-Inform said.
• July corn found little following through buying after filling a small chart gap from Monday and posting an intraday high at $8.13 3/4. Initial support comes in around yesterday’s low at $7.90 1/2.

Soybean futures are mixed, with soymeal now mostly firmer and soyoil higher but fading from its earlier highs.

• Nearby soybeans futures are higher in a corrective, technical rebound from Monday’s losses and support from strength in soyoil. The potential that delayed corn planting may lead to higher soybean acres is weighing on new-crop futures.
• USDA reported the U.S. soybean crop at 8% planted as of Sunday, meeting analysts’ expectations but below the five-year average of 13%.
• Soyoil futures are firmer on mild corrective buying following yesterday’s sharp losses. But buyer interest is limited and the market is at risk of additional chart-based selling if Monday’s lows don’t hold.  
• July soybeans are trading in a narrow range after finding support just above Monday’s low at $16.35. Initial resistance is seen at the 20-day moving average at $16.67 3/4.

Wheat futures are lower after erasing overnight gains, with nearby HRW and SRW contracts down 5 to 7 cents.

• Winter wheat futures are trading near overnight lows amid expectations recent rains will boost drought-stressed crops in the U.S. Plains.
• Weekly USDA crop ratings fell short of expectations. USDA reported 27% of the winter wheat crop in “good” or “excellent” condition through Sunday, unchanged from the previous week's 34-year low. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped another 6.9 points to 253.9, which is 73.6 points below the five-year average for the beginning of May. The SRW crop inched 0.4 point higher to 351.0, thought’s still 8.8 points below the five-year average for the date.
• Spring wheat planting fell further behind schedule last week. USDA reported 19% of the crop was planted as of Sunday, up from 13% a week earlier but behind the 28% five-year average. North Dakota farmers had seeded only 5% of the crop.
• Major flooding continues in northern areas of the Red River, World Weather said. Rains expected through the weekend will further delay fieldwork and possibly cause more areas of flooding.

Live and feeder cattle are higher at midmorning.

• Live cattle are higher on corrective buying following recent sharp losses and signs of strength in wholesale beef.
• Feeder cattle are gaining support from weakness in corn futures.
• Choice cutout values rose $1.77 Monday to $262.55, while Select gained 26 cents. Movement slowed to 79 loads, suggesting retailers are becoming more selective after actively buying recently ahead of the spring and summer grilling season.
• Traders are waiting to see whether last week’s unexpected cash market strength continues. Cash cattle averaged $143.34 last week, up 32 cents from the previous week.
• June live cattle reached a high for the week at $136.275, just under resistance at the 10- and 50-day moving averages. Further strength may prompt bulls to target last week’s high at $136.85.

Hog futures are lower, led by summer-month contracts.

• Lean hog futures extended recent price weakness on bearish technicals and slipping cash fundamentals.
• The CME lean hog index fell 18 cents to $101.59, the fourth consecutive daily decline. The index currently holds a premium of around $1.76 to nearby May futures.
• The June contract trimmed its premium to the cash index to around $2.50. Over the past five years, the cash index has firmed $8.77 from the beginning of May to mid-June.
• Wholesale pork jumped sharply to start the week, with cutout values up $2 to $106.58 on strength in most cuts. Movement totaled 290.52 loads.
• June lean hogs are trading within Monday’s range. The sharp selloff the previous two weeks sent the contract into oversold conditions, based on a current Relative Strength Index around 29.3. Corrective buying could emerge if June can hold above Monday’s low at $102.90.