Market Snapshot | February 28, 2023

Corn futures are pressing lower, taking spillover weakness from the soy complex, despite supportive outside markets as crude oil futures inch higher and the U.S. dollar faces moderate pressure.
Some areas in west-central, northern and far southern Argentina will benefit from rain today into Saturday while much of the country will be warm to hot and mostly dry and see rising levels of crop stress and declining yield potential, states World Weather Inc.
South American crop consultant, Dr. Michael Cordonnier lowered his Brazilian corn crop estimate by 2 MMT this week to 121 MMT amid delayed safrinha corn planting. Cordonnier lowered his Argentine corn estimate by 2 MMT to 41 MMT, due to the ongoing drought.
March corn has breached initial support at $6.40 1/4, with stronger support lying at $6.37. Initial resistance is at $6.49 1/2.

Soybeans are extending the previous session’s push lower as technnicals continue to erode. Traders also anticipate improved harvest conditions in Brazil over the next two weeks and weakening export activity.
Cordonnier lowered his estimate for the Argentine soybean crop by 2 MMT to 32 MMT, noting a neutral bias going forward. Cordonnier left his Brazil estimate unchanged at 151 MMT.
Weather in Brazil is expected to be relatively normal over the next two weeks. Fieldwork in Mato Grosso should advance relatively well over the next two weeks with harvesting advancing around daily showers and thunderstorms, according to World Weather.
Malaysian palm oil futures extended early losses on Tuesday on dull exports and rising production but were set for a near 8.5% monthly gain as flood risk warnings raised production concerns.
May soybeans have plunged below $15.00 for the first time since Jan. 25. Support is at $14.76. Initial resistance is at the 40-day moving average of $15.00 1/4.

Winter wheat futures are mostly firmer, while spring wheat is unchanged to 2 cents lower.

Some winter wheat contracts are firmer at midmorning amid light corrective buying on ideas recent, sharp losses were overdone.
Individual state crop conditions ratings indicated further decline of the HRW wheat crop during February. When the updated crop condition ratings were plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the HRW crop dropped 5.0 points from the end of January to a rating of 264.1.
World Weather Inc. says recent rain and snow in the Central Plains has induced some short-term improvement in soil moisture and crop conditions may improve if periodic precip continues while seasonal warming evolves.
Dryness remains a concern in southern Texas, portions of West Texas and western areas of HRW wheat country, notes World Weather.
May SRW wheat dipped as low as $7.02 1/2 where initial support lies. Initial resistance stands at $7.20 3/4.

Live cattle and feeders are modestly higher.

Live cattle are higher, reversing some of the previous session’s losses as bullish fundamentals prevail.
Wholesale beef continued its rally on Monday, with Choice firming $1.06 to $288.34, while Select rose $2.17 to $279.25, narrowing the Choice/Select spread to $9.09.
Last week’s average cash cattle price of $163.72 was the highest since April 2015. While packers have actively raised prices, their margins have remained in the black due to strong wholesale beef gains. Though packers have access to fresh supplies for March this week, likely slowing down recent price uptrends, but cash sources expect another week of cash market strength.
April live cattle are pivoting around the 10-day moving average near $164.89, with initial resistance at $165.69 and initial support at $164.52.

Hog futures are mixed, with summer months notching mild losses.

April lean hog futures are trading modestly higher, with limited selling interest after facing a notable decline in the previous session.
The CME lean hog index broke a 15-day series of gains with a 24-cent drop on Monday, but the rally from the seasonal low resumed with a 73-cent gain today (as of Feb. 24.)
April lean hog futures are trading around $6.50 above today’s cash quote, which is near the five-year average gain in the cash index from now until mid-April.
Pork cutout rose 59 cents on Monday to $85.94, which is a bargain compared to Choice beef. Movement was strong at 270.5 loads.
April lean hogs have tested initial resistance at the 20-day moving average near $85.41 and managed to hover above initial support at $83.84.

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