Market Snapshot | January 24, 2022

Corn futures are modestly lower at midmorning but up from overnight lows.

• Corn futures are under mild pressure but have trimmed overnight declines with support from strength in wheat.
• Beneficial rain fell on much of Paraguay and some nearby areas in Brazil’s Mato Grosso do Sul over the weekend, though much of it was too light to do more than temporarily increase soil moisture in the hot temperatures, World Weather Inc. said. Portions of Rio Grande do Sul also received beneficial rain. Rainfall totals in Paraguay and Rio Grande do Sul were 0.04 to 0.71 inch with several totals of 0.94 to 2.21 inches.
• USDA reported 1.116 MMT of corn inspected for export during the week ended Jan. 20, down from 1.237 MMT the previous week and within expectations ranging from 900,000 MT to 1.6 MMT.
• USDA reported a daily corn sale of 150,000 MT to unknown destinations for 2021-22.
• March corn overnight reached $6.19 1/2, the contract’s highest intraday price since $6.25 on June 11, before fading. The contract’s 20-cent gain last week may have bulls targeting the June 11 high as well as the intraday high for that month at $6.33. Initial support is seen at the 10- and 20-day moving averages of $6.03 3/4 and $6.03, respectively.

Soy complex futures are broadly lower, led by declines of over 15 cents in soybeans; soymeal contracts are down $1 to $2-plus, while soyoil is down more than 100 points.

• Soybeans are under pressure from profit-taking following last week’s rally to seven-month highs and expectations weekend rains will improve crop conditions in Argentina and Brazil.
• USDA reported daily soybean sales of 132,000 MT to China – half for the 2021-22 marketing year and half for 2022-23.
• Paraguay and far southern Brazil are expected to receive a “significant” increase in rain tomorrow through Friday, World Weather said. “Crops that have not been too badly harmed by hot and dry weather this season should see an increase in yield potentials,” the forecaster said.
• In Argentina, weekend rains boosted in crop and soil conditions for much of the country, with the exception of some northern areas, where excessively hot and dry conditions caused further deterioration in crop conditions.
• Harvest of Brazil’s 2021-22 soybean crop has reached 5.0% of the estimated area as work in Mato Grosso accelerated amid improved weather, AgRural said today. A year ago, just 0.7% of the crop was harvested. Soybean yields in Mato Grosso so far were “satisfactory,” AgRural said.
• USDA reported 1.298 MMT of soybeans inspected for export during the week ended Jan. 20, down from 1.727 MMT the previous week and at the low end of expectations ranging from 1.2 MMT to 1.9 MMT.
• March soybeans dropped under Friday’s low and fell as low as $13.90 1/2, finding support around the 10-day moving average. Further support is seen at the 20-day moving average, $13.81 1/2.
• March soybean meal fell as low as $388.30, near a five-week low.

Wheat futures are higher, led by gains of 14 to 18 cents in HRW contracts.

• HRW futures reached the highest levels in three weeks and SRW and spring wheat also climbed on followthrough from last week’s gains and concerns a potential Russia invasion of Ukraine may disrupt the global wheat trade.
• USDA reported 400,973 MT of wheat inspected for export during the week ended Jan. 20, up from 384,291 MT the previous week. Expectations ranged from 250,000 MT to 450,000 MT.
• March HRW futures rose as high as $8.14 1/4, the contract’s highest intraday price since $8.17 on Jan. 3. The contract gained 48 1/4 cents last week.
• March SRW wheat futures $7.96 1/2 after gaining 38 1/2 cents last week. Initial resistance is seen at the psychologically important $8.00 level up to last week’s high of $8.02 3/4.

Cattle futures are sharply lower this morning.

• Live cattle futures tumbled to the lowest levels in over two months following bearish numbers in  USDA’s Cattle on Feed Report Friday.
• Feedlot placements during December were estimated at 1.963 million head, up 6.5% from the same month in 2020 and above expectations for an increase closer to 2.6%.
• Feedlot inventories as of Jan. 1 rose 0.6% to an estimated 12.04 million head, contrary to expectations for a 0.2% decline.
• USDA’s Cold Storage Report after today’s close will detail meat stocks in frozen storage as of Dec. 31. The five-year average is an 8.8-million-lb. build in beef stocks and a 12.8-million-lb. decline in pork stocks during December.
• April live cattle fell as low as $139.325, the contract’s lowest price since Nov. 15.

Lean hog futures are mixed at midmorning, with nearby contracts lower and deferreds higher.

• Nearby hog futures are under mild corrective pressure after last week’s steep rally sent prices to the highest levels since mid-October. Firming cash fundamentals are providing underlying support to futures.
• The CME lean hog index is up 72 cents today to $77.51, the highest since Nov. 10, though February futures’ wide premium to the index may limit price upside this week.
• Hog prices are also supported by expectations meatpackers will soon recover from Covid-related slowdowns and increase slaughter back to normal levels. Slaughter last week was up 3.0% from last week but 10% under year-ago levels.
• Pork cutout values ended last week at $93.29, up from $89.07 at the end of the previous week. Movement was relatively light at about 243 loads.