Ahead of the Open | May 17, 2022
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 2 to 5 cents higher.
Wheat: 8 to 22 cents lower.
GENERAL COMMENTS: Wheat futures fell overnight on easing concerns over India supplies, while corn dropped slightly after U.S. farmers made a large jump in planting progress last week. Soybeans firmed late in the overnight session. Malaysian palm oil futures fell slightly while front-month U.S. crude is modestly higher and near eight-week highs. U.S. stock index futures point to a firmer open, while the U.S. dollar index is down more than 700 points.
India eased export restrictions slightly, saying it will allow overseas wheat shipments awaiting customs clearance, also wheat exports to Egypt, the government said. “It has been decided that wherever wheat consignments have been handed over to Customs for examination and have been registered into their (Customs) systems,” either on May 13 or earlier, would be allowed to be shipped out, the government said. Wheat futures soared at the beginning of the week after India said it would only allow exports backed by letters of credit, or payment guarantees, issued before May 13.
The U.S. hopes to convince India to reconsider its wheat export ban. Speaking at a press briefing in New York on Global Food security, U.S. Ambassador to the UN Linda Thomas-Greenfield said “We have seen the report of India’s decision. We’re encouraging countries not to restrict exports because we think any restrictions on exports will exacerbate the food shortages.”
Ukrainian national railway company Ukrzaliznytsia will restrict corn transportation to the Danube port of Reni from May 18 for an indefinite period, APK-Inform agriculture consultancy said. It gave no reason for the decision, but it previously said that similar restrictions were imposed due to congestion of rail cars near the crossing points. “The measures envisaged... will significantly simplify the border crossing of our grain goods and increase export volumes,” Ukraine’s agriculture minister said.
CORN: July corn futures fell as low as $7.97 1/4 overnight after gaining 28 1/4 cents Tuesday to $8.09 1/2, a two-week high. Weakness in wheat may weigh on corn, though delayed U.S. planting remains supportive to new-crop futures. USDA late Monday said 49% of the U.S. corn crop was planted as of Sunday, up from 22% a week earlier but behind the 67% average for the previous five years.
SOYBEANS: July soybeans rose as high as $16.62 overnight after gaining 10 cents yesterday to $16.56 1/2, the contract’s highest closing price since April 29. USDA reported the U.S. soybean crop was 30% planted as of Sunday, up from 12% a week earlier but behind the 39% five-year average.
WHEAT: USDA reported 27% of the winter wheat crop in “good” or “excellent” condition as of Sunday, down from 29% a week earlier. 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 6.5 points to 252.7, the lowest rating of the year and 73.8 points below the five-year average. The SRW crop improved 10.8 points to 357.1, its highest rating this spring, though that’s still 1.2 points below average for this date.
July SRW wheat overnight rose as high as $12.75 before fading. HRW and SRW trading limits are expanded $1.05 to following Monday’s limit-up closes.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-firmer
CATTLE: Live cattle may find support from continued corrective buying and signs of strength in wholesale beef. Choice cutout values rose $1.36 Monday to $260.31, a two-week high, but movement was light at 95 loads. Monday’s wholesale beef trade continued to show retailers are selective buyers at current price levels. Given near-record retail beef prices, retailers are seemingly not wanting to get caught with too much inventory. June live cattle gained $1.10 Monday to $133.175, while August feeders fell 60 cents to $167.425.
HOGS: Lean hogs may find support from a continuing corrective bounce based on ides the market has established a near-term low. Pork cutout values rose 38 cents Monday to a one-week high of $101.55 on strong movement of nearly 357 loads. The CME lean hog index is down 42 cents to $100.07 (as of May 13). After strong price gains the past two sessions, summer-month hog futures are trading at premiums to the cash index again. But traders may wait on the cash index to firm before building too much premium back into summer hog futures. China will buy 40,000 MT of local frozen pork for its state reserves on May 20, according to a notice on the website of the reserves management center. The country is buying pork to support prices.
June lean hog futures rallied $3.075 Monday to $103.825 and July hogs gained $3.60 to $104.80.
