Market Snapshot | December 21, 2022

Corn futures rose to the highest level in over a week behind spillover from strength in wheat. Strength in crude oil is also supporting grains.
Dry areas of Argentina are in line for rains the next two weeks, with the greatest amounts expected Dec. 22-25, though they likely won’t be enough to end the drought.
Southern Brazil is expected to remain dry over the next week, with some rains possible at the end of the 10-day window.
March corn extended a two-week uptrend and pushed above its 20-day moving average to reach 6.62 1/4, the highest intraday price since Dec. 1. The 40-day moving average at $6.65 1/4 poses initial resistance.

Soybeans are mostly 3 to 5 cents higher, nearby soymeal is more than $2 higher and nearby soyoil is modestly higher.

Soybean futures rose to the highest levels in over a week behind demand optimism, concerns over dryness in Argentina and strength in crude oil.
Rains expected in Argentina Thursday through Sunday may provide temporary relief from dryness is likely in nearly all areas. Beyond that period, the outlook is a little drier in the south and east-central crop areas. “A general soaking rain is still needed and not likely for a while, which leaves pressure on for greater rainfall to improve production potential,” World Weather said.
In Brazil, “timely rainfall is expected in most of the nation’s production region during the next two weeks. Some net drying is possible in the far southern Brazil and parts of Paraguay through the weekend, but timely rain will resume next week. Crop conditions elsewhere should be good for normal development.” Pockets of dryness in the south and west
March soybeans overnight reached $14.90 3/4, the contract’s highest intraday price since last week’s high at $14.92 on Dec. 13. A push above last week’s high as well as $14.97 1/4, the high so far this month, would have bulls targeting $15.00 or higher.

Winter wheat futures climbed to the highest levels in nearly three weeks amid short-covering. Concerns frigid Plains temperatures may damage wheat ground also supported prices.
Extreme low temperatures in the -30s and -20s Fahrenheit are likely in the Northern Plains. Subzero-degree low temperatures will occur southward to the Texas Panhandle, central Oklahoma, central Illinois and northern Indiana, World Weather said.
Iraq purchased 150,000 MT of milling wheat expected to be sourced from Australia.
March SRW wheat extended overnight gains and pushed above the 40-day moving average at $7.62 to reach $7.74 1/2, the highest intraday price since Dec. 2.

Live cattle are moderately to sharply higher at midsession.

February live cattle rallied to a contract high and front-month futures climbed to the highest levels since June 2015 on the continuation chart as expectations a tight supply outlook will keep packers paying up for animals pushed prices above key chart resistance.
While packers have slowed slaughter late in the year, cash prices are still expected to remain elevated with packers likely to bid more aggressively after the holidays, when they will need more supply.
Wholesale beef strength is also supporting futures. Choice beef cutout values rose $1.22 Tuesday to $265.05, the highest daily average since Nov. 3, on movement of 107 loads. February live cattle fell 47.5 cents Tuesday to $155.575.
February live cattle jumped above resistance at the November high of $156.95 and reached $157.325, surpassing the previous contract high of $157.225, posted Oct. 27.

Hog futures are up sharply, led by the nearby February contract.

Hog futures surged to two-week highs on technically-driven buying after nearby February futures scored new highs for the week. An outlook for tighter animal supplies in 2023 is also supporting futures.
The CME lean hog index rose 2 cents to $80.86, only 2 cents above the near 11-month low posted the day before. With slaughter schedules shortened for the holidays and packers unlikely to actively pursue hogs, a seasonal low in the cash index isn’t likely until early 2023.
Pork cutout values fell $2.51 Tuesday to $84.93, back near an 11-month low posted last week, but movement was strong at 336 loads.
China’s state planner said on Wednesday it called a meeting of hog industry experts to ensure stable prices after recent excessive declines. According to experts the slump was due to a “temporary” period of weak consumption, it said, adding that there is no oversupply.
February lean hogs forged above the 20-day moving average around $85.985 and rose as high as $87.325, the contract’s highest intraday price since $87.75 on Dec. 7. The contract faces stiff resistance at the 50- and 40-day moving averages, which converge at $87.40 to $87.50.

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