Market Snapshot | May 4, 2022

Corn futures are mixed at midmorning, with old-crop contracts higher and new-crop lower.

• Nearby corn futures rebounded from a drop to one-week lows with support from a rally in wheat. New-crop futures are under mild pressure amid prospects for improved planting prospects next week.
• Starting Saturday, the eastern Corn Belt will see little rain, warmer temperatures and faster drying rates, World Weather Inc. said today. “Planting should quickly increase once the ground firms up after rain comes to an end Friday,” the forecaster said.
• U.S. ethanol production averaged 969,000 barrels per day (BPD) during the week ended April 29, up 6,000 bpd from the previous week and up 1.8% from the corresponding week last year, the Energy Information Administration reported. Ethanol stocks declined 78,000 barrels to 23.887 million barrels, the lowest level since the week ending Jan. 14. Ethanol stocks are down 10% from the end of March, which was the highest level since spring 2020.
• Ukraine exported 923,000 MT of grain in April, according to APK-Inform. That was down from 2.8 MMT for the month last year. The total included 768,486 MT of corn and 127,130 MT of wheat.
• July corn futures bounced back after falling as low as $7.89 1/2, the lowest intraday price since last week’s low of $7.81 on April 25.

Nearby soybean futures are 4 to 6 cents higher and soyoil is more than 150 points higher, while nearby soymeal is down around $2.

• Nearby soybeans rebounded from a drop to four-week lows behind strength in soyoil, wheat and crude oil.
• Continued weakness in soymeal and prospects for higher soybean acres may limit the upside.
• The market for sunflower oil has improved in the European Union as producers have adapted to the shortfall in Ukrainian shipments and some supplies have arrived by rail and truck, EU vegetable oil group FEDIOL said.
• July soybeans fell as low as $16.22, the lowest intraday price since $15.99 on April 7, before rebounding. Technicals have eroded with the market in a two-week downtrend and falling under near-term moving averages, signaling a potential peak.

Wheat futures are sharply higher, led by gains of around 30 cents in nearby HRW and SRW contracts.

• Winter wheat futures rose for the first day in six after a cut to India’s crop forecast fueled concerns over global supplies.
• India’s government slashed its estimate for the country’s 2021-22 wheat production by 5.7% to 105 MMT, citing the early onset of summer. The country is considering restricting wheat exports, Bloomberg reported.
• South Korea purchased 50,000 MT of U.S. milling wheat. Tunisia tendered to buy 100,000 MT of soft wheat, optional origin.
• July SRW wheat rose as high as $10.89 after dropping 10 cents Tuesday to $10.45 1/2, the fifth consecutive lower settlement and the contract’s lowest closing price since April 7.

Live and feeder cattle are mostly lower at midmorning.

• Live cattle are under mild pressure as recent weakness in wholesale beef prices fueled concern over consumer demand. Renewed strength in corn is weighing on feeder cattle.
• Choice cutout values fell $3.00 Tuesday to $259.55, a six-week low, but movement was strong at 176 loads. The drop indicates retailers are being selective buyers, but buying typically picks up during this part of May as grocers stock up on beef for early summer features.
• June live cattle fell as low as $134.55, well above this week’s low at $132.925.

Hog futures are sharply higher amid corrective buying.

• Lean hog futures are higher in a corrective bounce from sharp declines over the past two weeks.
• Cash fundamentals remain under pressure, with the CME lean hog index down 44 cents to $101.15, the fifth straight daily decline and a two-week low. With today’s strong rally, May hog futures are back to a mild premium to the cash index.
• Pork cutout values fell $1.02 Tuesday to $105.56 on movement of 310 loads. June lean hogs fell $2.775 Tuesday to $102.20, the lowest closing price since $101.875 on Jan. 19.
• June lean hogs are trading within Tuesday’s range and have climbed modestly out of oversold conditions, based on the Relative Strength Index around 29.3.