Market Snapshot | January 20, 2022

Corn futures have turned slightly firmer at midmorning after erasing overnight declines.

• Corn futures recovered from overnight weakness to test yesterday’s high, boosted by spillover from strong gains in the soybean market.
• Dry conditions in South America also remain supportive. Little rain of significance is expected in Paraguay and far southern Brazil through Saturday, World Weather Inc. said. “Crop stress will increase as moisture from recent rain is lost to evaporation while areas that missed out on rain see further declines in yields,” the forecaster said.
• Weather looks a little better for Argentina, where frequent rainfall expected through Jan. 27 should improve crop and soil conditions across the country, World Weather said. However, excessive heat is expected to persist in northern parts of the country.
• March corn futures climbed as high as $6.14, 1/2 cent under yesterday’s high. A push above yesterday’s high may have bulls targeting a six-month intraday high at $6.17 3/4, reached Dec. 28. Initial support is seen at the 10- and 20-day moving averages, both around $6.02.

Soy complex futures are sharply higher, with soybeans up over 25 cents, soymeal up over $4.00 and soyoil up around 150 points.

• March soybeans pushed above resistance at January’s previous high of $14.15 to reach $14.28 1/4, the contract’s highest price since mid-June.
• Dry weather in South America and optimism over exports continue to support soybeans.
• China’s soybean imports in December from the U.S. almost doubled compared to the previous month as more cargoes arrived after delays due to Hurricane Ida. China imported 6.09 MMT U.S. soybeans in December, up 68% from 3.63 MMT in November and up 4.0% from December 2020, customs data showed.
• Argentine farmers have sold 37.5 MMT of soybeans from the 2020-21 season so far, including 261,200 MT in the seven days to Jan. 12, the country’s agriculture ministry said. The sales pace was behind the previous season. At this time last year, sales of 38.6 MMT of soybeans had been registered.
• Soybean technicals have grown increasingly bullish as prices rallied this week. Upside targets for bulls include the contract high of $14.45 1/2 reached in June.
• March soybean oil rose as high as 62.78 cents, the highest since Oct. 21.

Winter wheat futures are mixed while spring wheat is firmly higher.

• Winter wheat futures fell early in a corrective setback following sharp gains the previous two days but have come off their lows with HRW contracts modestly higher.
• Prices remain supported by concerns over a potential Russia invasion of Ukraine and implications for global wheat trade.
• Bitter cold in the U.S. Plains, including Nebraska and northern Kansas, is not expected to cause significant damage to the winter wheat crop.
• “Temperatures were cold enough to possibly induce some crop damage,” World Weather said. “But damage should have been extremely low, if it occurred at all.”
• March SRW wheat rose as high as $8.02 3/4, the contract’s highest intraday price since $8.08 on Dec. 28, before retreating. March HRW futures reached $8.06 1/2, the highest since Jan. 5, before sinking to mild losses.

Cattle futures are modestly lower at midmorning.

• Live cattle futures are under mild pressure in a corrective setback from yesterday’s gains, but signs the cash market is establishing a bottom is underpinning the market.
• Cash sources reported light to moderate cash cattle trade so far this week at roughly steady prices compared with last week. Live steers so far this week averaged $136.75, slightly firmer compared to last week’s average of $136.61, USDA reported yesterday.
• Futures are also supported by wholesale beef strength and indications slaughter rates are returning to normal following Covid-related slowdowns earlier this month.
• Choice cutout values rose $2.11 yesterday to $291.60, the highest daily average since Oct. 1. Movement totaled 115 loads.
• April live cattle face resistance at yesterday’s high of $143.775, the highest intraday price since $143.90 on Jan. 4.

Lean hog futures are moderately higher.

• Hog futures extended a week-long rally on strengthening cash fundamentals and increasingly bullish technicals.
• April lean hogs gapped higher and rallied to a contract high at $92.875. Summer-month contracts also posted new highs.
• Pork cutout values jumped $8.26 yesterday to $95.47, the highest since Nov. 11 and an indication retail demand has improved this year while supplies tightened, in part due to Covid-related slaughter plant slowdowns.
• The CME lean hog index rose 7 cents to $76.85, the highest since Nov. 10.