Market Snapshot | June 14, 2022

Corn futures are mostly lower at midmorning.

• Corn futures are under mild pressure in followthrough from Monday’s losses, with spillover from weakness in wheat weighing on prices.
• Late Monday, USDA reported a slight, unexpected drop in U.S. corn crop conditions, with the “good” to “excellent” rating falling a point to 72%. Analysts on average expected the rating to stay at 73%. The crop was 97% planted, matching the five-year average.
• When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 2.8 points to 379.7, though that was still 5.8 points above the five-year average.
• USDA reported daily corn sales of 148,000 MT to Mexico, including 103,000 MT for 2021-22 and 45,000 MT for 2022-23.
• Ukraine asked European partners for temporary grain storage to help with its upcoming harvest, Bloomberg reported. Ukraine’s Deputy Agriculture Minister Markian Dmytrasevych said Russian attacks and occupation in southern and eastern areas of the country reduced grain storage capacity by 15 MMT.
• Crop Consultant Dr. Michael Cordonnier raised his Brazilian corn crop estimate by 3 MMT to 110 MMT, noting that while yields on early harvested safrinha corn in Brazil are poor, Conab again increased its planted acreage figure last week.

Soybeans have turned mixed after earlier price gains. Soymeal is down around $3; nearby soyoil is down slightly.

• Soybeans futures failed to sustain overnight strength and joined a downturn in corn and wheat, with weakness in the U.S. stock market and recession concerns burdening many commodities.
• Strong demand continues to support prices, though farmers have caught up on delayed planting and USDA condition ratings indicate the crop is off to a strong start.
• USDA’s initial soybean ratings of the season showed 70% of the crop as “good” to “excellent,” meeting trade expectations. The soybean crop started the growing season with a 370.9 CCI rating, 12.9 points above last year at this time and 3.2 points above the five-year average.
• Cordonnier raised his Brazilian soybean crop estimate by 1 MMT to 123 MMT, noting better-than-expected yields in Rio Grande do Sul and northeastern states. In Argentina, Cordonnier raised his soybean estimate by 1 MMT to 42 MMT, citing favorable yields in northern areas.

Wheat futures are lower, led by declines of 15 to 17 cents in HRW and SRW contracts.

• Wheat futures are under pressure from the accelerating winter harvest and a dollar that’s strengthened to 20-year highs. Near-completion of spring wheat planting is also a source of pressure.
• USDA reported spring wheat planting 94% complete as of Sunday, up from 82% last week, while the winter wheat harvest was 10% complete, 2 percentage points behind the five-year average. The first spring wheat CCI rating was 2.8 points below average for the date.
• Japan is seeking 186,441 MT of milling wheat in its weekly tender. Bangladesh tendered to buy 50,000 MT of optional origin milling wheat.

Live cattle are mixed and feeder cattle are lower at midmorning.

• Nearby live cattle are posting a modest corrective bounce from Monday’s sharp declines but are trading in narrow ranges with limited upside potential amid expectations for weaker cash. Concerns a potential recession will crimp beef demand are also weighing on the market.
• The combination of sharp futures declines and wholesale beef weakness has traders anticipating lower cash trade after prices last week averaged $140.14, up over $2.00 from the previous week.
• Choice beef cutout values fell 78 cents Monday to $270.54 on light movement of 93 loads.

Hog futures are higher, led by summer contracts.

• Lean hog futures extended Monday’s gains behind bullish technicals and cash firmness.
• The CME lean hog index is 21 cents higher at $107.40 (as of June 10), ending a three-day slide.
• Pork cutout values rose $2.22 Monday to $111.38 on strong movement of nearly 307 loads.
• July lean hogs on Monday rose $1.20 to $106.675 and posted a bullish “outside day” higher on the daily chart after rebounding from a four-week low, which is encouraging followthrough chart-based buying.