Market Snapshot | July 18, 2022

Corn futures are 10 to 11 cents higher at mid-morning

• Corn futures are higher amid concerns a hot week ahead for parts of the central U.S. could stress the crop with pollination underway.
• The Plains and western Corn Belt are expected to experience extreme, crop-stressing heat this week, with daily highs in the 90s to 105 Fahrenheit through the weekend, World Weather Inc. said. Some relief will be possible during the second half of next week as temperatures cool and rain chances improve. The northern and eastern Midwest are expected to receive timely rainfall.
• USDA reported 1.074 MMT (42.3 million bu.) of corn inspected for export during the week ended July 14, up from 934,533 a week earlier and at the high end of trade expectations.
• Funds continued to slash long exposure in the grain markets. Large speculators cut their net long in the corn market to 151,174 futures and options contracts as of July 12, the lowest since October 2020, based on Commitments of Traders data from the Commodity Futures Trading Commission.
• Traders await USDA’s weekly crop ratings after today’s close. A week ago, USDA rated 64% of the U.S. corn crop in “good” or “excellent” condition as of July 10, unchanged from the previous week.

Soybean futures are 39 to 42 cents higher, nearby soymeal is about $4-plus higher and nearby soyoil is around 260 points higher.

• Soybean futures joined a rally in grain and soy complex futures on support from concerns over Midwest heat and sharp gains in crude oil.
• Extreme heat could lead to further deterioration in USDA crop ratings. USDA rated the crop 62% “good” to “excellent” as of July 10, down one percentage point from the previous week.
• USDA reported 362,622 MT (13.3 million bu.) of soybeans inspected for export for the week ended July 14, up from 358,527 MT the previous week and within trade expectations.
• Indonesia has scrapped its export levy for all palm oil products until Aug. 31 amid bulging inventories. Indonesia will have to export 6 MMT of palm oil through August if it wants to cut its ballooning inventory levels back to normal, an industry association said.
• The managed money net long in soybeans fell to 95,711 futures and options contracts for the week ended, the lowest since mid-December, according to CFTC data.
• November soybeans rose to $13.91 1/2, the highest since July 12, after sinking 54 1/4 cents last week.

Wheat futures are 24 to 36 cents higher across all three classes.

• Wheat futures are higher on corrective buying following last week’s tumble to five-month lows. A weaker dollar is also a supportive factor.
• USDA reported 185,989 MT (6.8 million bu.) of wheat inspected for export during the week ended July 14, down from 310,002 MT the previous week and at the low end of trade expectations.
• Russian wheat export prices rose slightly last week, helped by a stronger ruble, IKAR agriculture consultancy said, adding that exports quickened with arrival of the new crop. Prices for wheat with 12.5% protein content and for supply from Black Sea ports rose by $2 to $360 per MT free on board (FOB) at the end of last week, IKAR said.
• The managed money net short in SRW wheat expanded over 6,400 contracts to 6,444 futures and options contracts as of July 12, CFTC data showed.
• Egypt tendered to buy an unspecified amount of wheat to be sourced from the U.S., Canada, Australia, Argentina or Brazil.

Live cattle futures are mixed at midmorning while feeder cattle are lower.

• Live cattle futures faded to losses after a brief opening higher amid expectations recent weakness in the cash market will extend this week.
• USDA-reported live steers averaged $142.09 through Friday morning, down from the previous week’s average of $144.35. Much of the decline was driven by the northern market, where tight supplies had boosted prices recently.
• Traders await USDA’s monthly Cattle on Feed and biannual Cattle Inventory Reports Friday, and will gauge the monthly Cold Storage Report, also July 22, for indications of how demand is lining up with supplies.
• Feeder cattle are being pressured by the strength in corn.

Hog futures are moderately to sharply higher, led by the nearby August contract.

• Nearby lean hog futures gapped higher and rose to the highest level in nearly three months on support from continued strength in cash fundamentals.
• The CME lean hog index is up 76 cents to $114.15 (as of July 14), the highest in nearly 13 months. August futures’ discount to the index has narrowed to about $2.22.
• China imported 120,000 MT of pork in June, down 10,000 MT (7.7%) from May and 64.2% less than last year. Through the first half of this year, China’s pork imports at 800,000 MT fell 65.1% from the same period last year.
• August lean hogs reached $112.725, the contract’s highest intraday price since April 29.