Ahead of the Open | April 19, 2022
Corn: 2 to 5 cents lower.
Soybeans: 2 to 6 cents lower.
Wheat: Winter wheat 3 to 7 cents lower, spring wheat steady to 2 cents lower.
GENERAL COMMENTS: Corn futures faded under light corrective pressure overnight after initially extending a rally near 10-year highs. Soybean and wheat futures also declined. Nearby U.S. crude oil futures are down nearly $3 this morning. U.S. stock index futures indicate a firmer open, while the U.S. dollar index is slightly firmer after extending a run to two-year highs.
USDA reported a daily sale of 123,650 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year.
Wet conditions will continue to limit U.S. planting progress. The Midwest will receive frequent precipitation over the next week along with temperatures that will often be cool, keeping fieldwork to a minimum in most areas, World Weather Inc. said today. “Most of the precipitation should not be heavy enough to cause lasting delays to fieldwork if warmer and drier weather were to follow,” the forecaster said. The April 27-May 3 period “will be drier overall and planting should increase.”
Winter wheat conditions deteriorated last week as drought persisted in the Plains. USDA rated 30% of U.S. the crop in good-to-excellent condition, down two percentage points from a week ago, below an average of analyst expectations and the lowest for this time of year since 1996. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 6.3 points to 271.5, which is 59.4 points below the five-year average for mid-April. The Kansas crop improved slightly but the CCI ratings deteriorated in other six states. The SRW crop improved 4.8 points on the week to 350.2, led by Illinois and Michigan, though that’s still 9.0 points below the five-year average for the date.
With corn and wheat prices soaring as the Russia/Ukraine war drags on, the United Nations warned an additional 13 million people could be left undernourished. Drought-affected countries across the Horn of Africa are likely to be the hardest hit, the World Food Program says. The World Food Program is spending $70 million more a month to buy the same amount of food as last year. Also, the World Food Program says Ukraine has insufficient storage capacity even for will be a reduced 2022 grain harvest.
Japan is seeking 27,320 MT of Australian wheat in its weekly tender.
CORN: July corn reached a contract high at $8.14 overnight before coming under pressure, while December futures hit $7.55, a contract high for the seventh straight session. USDA reported 4% of the U.S. corn crop was planted as of April 17, up from 2% a week earlier but lower than the 6% average the previous five years. The crop was expected to be about 5% planted.
SOYBEANS: July soybeans reached a three-week high at $17.05 3/4 overnight before fading. The most-active contract gained 28 cents yesterday to $16.93 1/4. USDA reported 1% of the U.S. crop was planted as of April 17, lower than the 2% five-year average.
WHEAT: July HRW wheat reached a six-week high at $12.02 1/4 overnight before fading, while July SRW held within yesterday’s range after gaining 24 1/4 cents yesterday to $11.28 3/4.
CATTLE:Live cattle may face followthrough technical pressure from a weak close yesterday, while weakness in corn prices may support feeders. Cash cattle averaged $141.02 last week, up $2.20 from the previous week. Bullish traders and feedlots have hopes of higher cash prices again this week, though that would require breaking the pattern of up-and-down cash prices every other week over the past six weeks. Bids likely won’t be established until the middle of the week, and with USDA’s Cattle on Feed Report out Friday afternoon, cash trade may be delayed until after that data is released. Choice cutout values fell $1.54 yesterday to $271.08, though movement was relatively firm at 107 loads.
June live cattle fell 62.5 cents yesterday to $135.80, while May feeder cattle fell $2.625 to $159.15.
China will auction 3,000 lbs. of frozen beef and mutton from state reserves on Thursday.
HOGS: Lean hog futures may see followthrough buying from a sharply higher close yesterday and strengthening cash fundamentals. The CME lean hog index is up another 35 cents, the fourth straight daily gain, to $100.32. Pork cutout values fell 72 cents yesterday to $109.49, down from a seven-week high reached Friday. Movement totaled 295 loads. June lean hogs jumped $3.925 yesterday to $122.40, the contract’s highest closing price since $124.225 on March 30.