Market Snapshot | January 28, 2022

Corn futures are mostly 6 cents higher at midmorning.

• Corn futures rose to the highest levels since May on spillover from rallying soybeans and reduced crop prospects in South America. Crude oil’s rally to seven-year highs contributed to the bullish backdrop.
• March corn pushed above resistance at the June high of $6.33 and reached $6.35 1/4, the contract’s highest intraday price since the $6.40 1/2 contract high May 7. The lead contract is up from $6.16 1/4 at the end of last week.
• South American weather continues to be in market focus. Southern Brazil received some rain relief this week, but the country’s first corn crop has already been damaged due to drought or extended dryness.
• Paraguay into Brazil’s Santa Catarina and Rio Grande do Sul will see a drier weather pattern through Feb. 2 and stress to crops will increase as moisture from recent rain is lost to evaporation, while areas that missed out on rain recently will see steady declines in crop yields, World Weather Inc. said today.

Soy complex futures are sharply higher, led by gains of around 150 points in soyoil and over 20 cents in soybeans; soymeal is up $6 to $7.

• Soybeans futures surged to contract highs for the second straight day on drought in South America and Malaysian palm oil’s rally to record highs. Soyoil futures also posted contract highs.
• Fresh demand also supported soybeans as USDA reported a flurry of daily soybean sales. Exporters sold 141,514 MT of soybeans for delivery to Mexico and 251,500 MT to “unknown destinations,” both during the 2021-22 marketing year. USDA also reported exporters sold 264,000 MT of soybeans for delivery to China during the 2022-23 marketing year.
• Indonesia, the world's biggest palm oil producer and exporter, announced a 20% mandatory domestic sales obligation for all palm producers to slow soaring cooking oil prices. The move boosted Malaysian palm oil futures to a record high of 5,639 ringgit ($1,346.47) per MT.
• Argentina’s soybean plantings in 2021-22 are expected to total 16.3 million hectares, about 100,000 hectares than previously estimated, the Buenos Aires Grain Exchange said yesterday. The country’s crops have been hurt by drought despite recent rains.
• March soybeans climbed to a contract high at $14.79, topping the previous contract high of $14.56 1/2 posted yesterday. The contract is up from $14.14 1/4 at the end of last week. The soybean continuation chart indicates resistance around $14.80, and a breach above that would have bulls targeting $15.00.
• March soyoil notched a contract high at 66.34 cents, up from 63.00 cents at the end of last week. March soymeal touched $413.10, up from $392.70 at the end of last week.

Wheat futures are higher, led by gains of around 20 cents in nearby spring wheat; SRW wheat is up around 12 to 14 cents and HRW is up 14 to 16 cents.

• Wheat futures climbed in a short-covering corrective bounce following two days of sharp losses. Concerns a Russian invasion of Ukraine may disrupt the global wheat trade underpinned prices.
• USDA yesterday reported unexpectedly strong weekly U.S. wheat export sales at 676,700 MT for 2021-22, which was a marketing-year high. However, total export commitments (exports plus outstanding sales) are still 21% behind year-ago and 16% behind the five-year average.
• March SRW wheat fell as low as $7.74 3/4 overnight, 3/4 cent above yesterday’s low, before rebounding as high as $7.93 1/2. The lead contract is on track for a second consecutive weekly gain after ending last week at $7.80. Initial support is seen at yesterday’s low of $7.74.
• March HRW futures fell overnight to $7.90, a low for the week, before recovering and pushing back above $8.10. The lead contract is up from $7.93 1/4 at the end of last week.

Cattle futures are higher at midmorning.

• Live cattle futures are higher as firmer technicals and broader strength in commodities, including grains and crude oil, overshadowed weaker cash fundamentals.
• Cash cattle prices this week have resumed the downtrend that’s held since late December. Packers have stepped up slaughter after Covid-related worker absences forced slowdowns earlier this month, signaling rising beef supplies as wholesale beef prices erode.
• Live steers averaged $136.97 through yesterday, down 53 cents from last week’s average.
• Choice cutout values fell another 35 cents yesterday to $289.11, the lowest daily average since Jan. 17, while Select fell 62 cents to $279.10. Movement was again strong at 136 loads.
• April live cattle rose as high at $142.85, the contract’s highest intraday price since $143.10 on Jan. 21 and up from last week close at $142.10.

Lean hog futures are mixed after fading from an early rally.

• Hog futures are under further corrective pressure surging to contract highs over the past week.
• Stronger cash fundamentals continue to underpin hog prices. Today’s CME lean hog index is up 55 cents to $79.75, the highest since late October.
• Pork cutout values surged $3.59 yesterday to $98.19, the highest since Nov. 3 and led by gains of over $7.00 in bellies and hams. Movement was light at about 254 loads.
• April lean hogs fell as low as $94.40 after rising earlier to $97.075. The most-active contract is heading for its second consecutive weekly gain after closing last week at $94.95.