Ahead of the Open | April 22, 2022
GRAIN CALLS
Corn: 2 to 6 cents higher.
Soybeans: 5 to 9 cents higher.
Wheat: 2 to 8 cents higher.
GENERAL COMMENTS: Soybean futures climbed to two-month highs overnight as the market extended yesterday’s export sales-driven gains, while corn and wheat also gained. Malaysian palm oil futures posted the market’s first weekly decline in three, while front-month U.S. crude oil futures are down around $1.50 this morning. U.S. stock index futures indicate a weaker open, while the U.S. dollar index is around 300 points higher, reaching a two-year high.
USDA reported daily corn sales of 1.347 MMT to China – 735,000 MT for delivery during the 2021-22 marketing year and 612,000 MT for 2022-23. USDA also reported daily sales of 281,000 MT of corn (90,200 MT for 2021-22 and 190,800 MT for 2022-23) and 144,000 MT of soybeans (48,000 MT for 2021-22 and 96,000 MT for 2022-23) for delivery to Mexico.
Indonesia will ban palm oil exports from April 28, after President Joko Widodo said today he will stop shipments of cooking oil and its raw material to control domestic prices. Indonesia is the world’s biggest exporter of the vegetable oil. The country moved to restrict palm oil exports in late January, but later lifted the restrictions in March. Soyoil futures surged to a record high.
Economists polled by Bloomberg lowered their growth forecasts for China again, as widespread Covid-19 lockdowns threaten to hold back the economy in the months ahead. Gross domestic product will likely expand 4.9% in 2022, down from the previous estimate of 5%, according to a survey of 62 economists.
China’s National Grain Trade Center announced it will sell 500,000 MT of imported soybeans from its state reserves on April 29.
Russia’s wheat export tax for April 27-May 5 will be $119.10 per MT, based on an indicative price of $370.20 per MT, up $8.40 from the previous week. The wheat export tax has risen for six consecutive weeks and is at its highest level.
CORN: July corn fell as low as $7.88 overnight before rebounding after finding support just above the 10-day moving average at $7.86 3/4. The most-active contact is heading for a modest weekly gain after ending last week at $7.83 3/4.
SOYBEANS: Surging soyoil futures led soybeans higher. July soybeans overnight reached $17.29 3/4, the contract’s highest intraday price since the contract high of $17.41 posted Feb. 24. The most-active contract is up from $16.65 1/4 at the end of last week.
WHEAT: July SRW wheat overnight fell as low as $10.60 3/4, the lowest intraday price since April 8, before rebounding at the end of the session.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-weaker
CATTLE: Live cattle futures are poised for a sharp weekly gain after stronger than expected cash trade this week sparked a technical breakout on daily charts. USDA-reported live steers so far this week averaged $142.89 through yesterday morning, up from last week's average of $141.02. Choice beef cutout values rose $1.35 yesterday to $270.17 on movement of 104 loads. The cash-led futures rally may be somewhat short-lived as slaughter numbers will build seasonally in coming months.
USDA releases monthly Cattle on Feed and Cold Storage Reports this afternoon. The Cattle on Feed Report is expected to show U.S. April 1 feedlot inventories up 0.4% from last year, with placements expected to be down 7.8% and marketings 1.8% below-ago levels. The Cold Storage Report will detail frozen meat stocks at the end of March. Over the past five years, beef stocks have averaged a decline of 15.5 million lbs. in March.
June live cattle futures jumped $1.275 yesterday to $139.90, up from $136.425 at the end of last week.
HOGS: Lean hog futures are heading for a weekly decline as slumping technicals and concerns over domestic and overseas pork demand. Pork cutout values gained $1.71 yesterday to $110.20, a cent under a seven-week high posted April 15, but movement was light at 184 loads and packers typically struggle to generate retail interest above $110.00. If retailer buying dries up again, packers will likely lower prices to keep product moving. June lean hogs fell $1.575 yesterday to $117.175, the contract’s lowest closing price since April 11 and down from $118.475 at the end of last week.
Over the past five years, pork stocks have averaged a decline of 18.6 million lbs. during March.
