Market Snapshot | January 13, 2022

Corn futures are 7 to 8 cents lower at midmorning.

• March corn futures fell to the lowest levels in over a week on improved rain prospects in South America and spillover from slumping soybeans.
• Southern Brazil is expected to see a shift in its weather pattern this weekend as Parana and nearby areas benefit from rain before showers and thunderstorms become better organized Jan. 16-23 from Rio Grande do Sul to Parana, World Weather Inc. said.
• “Rain is not likely to be heavy in many areas, but at least some relief from dryness should occur and crops that have not been too badly harmed by dryness will respond to the moisture,” the forecaster said.
• UDSA reported net U.S. corn sales of 457,700 MT for the week ended Jan. 6, up 79% from the previous week but down 59% from the average for the previous four weeks. Sales fell short of trade expectations for 500,000 MT to 1.5 MMT.
• The Rosario Grain Exchange lowered its forecast for Argentina’s corn crop by 8 MMT to 48 MMT. The country’s corn crop “continues to suffer two heat strokes that have followed each other with barely a week of respite in between,” the exchange said.
• March corn futures dropped under its 40-day moving average at $5.91 1/2 and fell as low as $5.85 1/4, the lowest intraday price since $5.84 3/4 on Jan. 3. Further support is seen around the mid-December lows at $5.81-$5.82.

Soy complex futures are broadly lower, led by declines of over 20 cents in nearby soybeans and drops of $8.00 to $9.00 in soymeal; soyoil is down around 60 points.

• Soybeans fell under profit-taking pressure following gains. Wetter forecasts for dry areas of Brazil and middling export sales also weighed on futures.
• USDA reported net U.S. soybean sales of 735,600 MT for the week ended Jan. 6, up 92% from the previous week but down 1% from the four-week average and at the lower end of expectations ranging from 400,000 MT to 1.2 MMT. China was a lead buyer at 301,800 MT, including 264,000 MT switched from unknown destinations.
• The Rosario Grain Exchange lowered its outlook for Argentina’s soybean crop, cutting its estimate 5 MMT to 40 MMT.
• China said it would raise domestic soybean output sharply in a drive to boost self-sufficiency. The country has set a goal to produce about 23 MMT of soybeans by end of 2025, up 40% from current output levels of 16.4 MMT, the ag ministry said.
• March soybeans fell as low as $13.70 3/4, down nearly 40 cents this week, before rebounding slightly. Support is seen at yesterday’s low at $13.66 1/2 and at the 20-day moving average of $13.56. A drop below those levels may have bears targeting the late-December lows around $13.34-$13.36.

Wheat futures are broadly lower, led by declines of 12 to 15 cents in HRW contracts.

• Wheat futures extended yesterday’s losses, which followed USDA’s higher-than-expected U.S. winter crop seedings estimates. Sluggish exports continue to pressure futures.
• Net U.S. wheat sales of 264,400 MT were up “noticeably” from the previous week, but down 20% from the prior four-week average, USDA said. Expectations ranged from 150,000 to 400,000 MT.
• Strategie Grains cut its forecast for European Union soft wheat exports in 2021-22 due to strong competition from the Black Sea region and Argentina. The consultancy now expects the bloc to ship 31.2 MMT of wheat this marketing year, down 300,000 MT from its previous forecast.
• The International Grains Council (IGC) raised its forecast for 2021-22 global wheat production, partly driven by an improved outlook for the crop in Australia. In its monthly update, IGC increased its 2021-22 world wheat crop outlook by 4 MMT to 781 MMT.
• Japan purchased 107,555 MT of wheat from its weekly tender, including 56,095 MT from the U.S. and 51,460 MT from Canada. South Korea tendered to buy up to 140,000 MT of optional origin corn. Iraq purchased around 150,000 MT of Australian milling wheat.

Cattle futures are firmer and trading in tight ranges.

• Live cattle gained support as extended strength in the boxed beef market more than overshadowed erosion in cash prices.
• Choice cutout values rose $1.71 yesterday to $279.93, the highest since Nov. 26 and up over $19.00 from a mid-December low at $260.26. Movement remained strong at 152 loads, indicating stepped-up demand from retailers restocking after the holidays.
• Futures’s upside may be limited by softer cash prices. USDA-reported live steer prices averaged $136.49 so far this week, down nearly $2.00 from last week's average.
• Net U.S. beef sales for the first week of 2022 totaled 9,700 MT, with top buyers including Japan (2,600 MT, including decreases of 300 MT), Mexico (1,400 MT) and South Korea (1,400 MT, including decreases of 500 MT), USDA reported.
• Feeder cattle are being supported by weakness in the corn market.
• Support in February live cattle futures is seen at this week’s low and the 100-day moving average in the $136.025 to $136.15 area. Resistance is seen around the 10-day moving average at $137.60.

Lean hog futures are lower, led by nearby contracts.

• Hog futures resumed the downturn that began late last week as weak technical helped send February futures to the lowest levels in over a month.
• February futures’ premium to the CME lean hog index has narrowed sharply. The market’s bearish momentum continues to prices lower.
• The CME lean hog index fell 7 cents to $75.06 but is still near the highest levels since mid-November.
• Pork cutout values rose $2.84 yesterday to an average of $84.46, led by gains of over $9.00 in both bellies and hams.
• Net U.S. pork sales for the first week of 2022 totaled 19,800 MT, primarily for Mexico, at 10,100 MT, including decreases of 300 MT. Japan and South Korea were also prominent buyers at 3,100 MT and 2,100 MT, respectively.
• February lean hog futures fell as low as $77.125, the lowest intraday price since $75.95 on Dec. 9.