Market Snapshot | February 3, 2022

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Corn futures are 4 to 5 cents lower at midmorning but come off their intra-day lows.

  • Corn futures fell to the lowest levels in over a week on profit-taking and technical selling but selling is limited by strength in soybeans.
  • USDA reported net U.S. corn sales of 1.175 MMT for the week ended Jan. 27, down 16% from the previous week but up 47% from the average for the previous four weeks. Sales were within expectations ranging from 600,000 MT to 1.3 million MMT. No sales were reported for 2022-23.
  • Exports of 1.177 MMT were down 19% from the previous week and down 1% from the prior four-week average.
  • Also today, USDA reported daily corn sales cancellations of 380,000 MT to China for 2021-22.
  • March corn futures fell as low as $6.10 1/4, the lowest intraday price since $6.09 1/4 on Jan. 24. Futures remain in an uptrend that’s lasted nearly five months, but upside momentum has stalled and technicals have eroded, with prices today falling under the 20-day moving aver for the first time in over two weeks.
  • Initial support in March futures is seen at the 40- and 50-day moving averages at $6.04 1/2 and $6.00, respectively. Resistance comes in at the nine-month high posted Jan. 31 at $6.42 1/2.

Soy complex futures are higher, led by a gains of over $3 in nearby soymeal and 4 to 6 cents in nearby soybeans; soyoil is marginally lower.

Wheat futures are lower, led by a drop of over 5 cents in spring wheat contracts; SRW and HRW futures have recovered some of the early declines.

  • SRW wheat futures fell near three-week lows and HRW and spring wheat also tumbled on followthrough technical weakness and soft export numbers.
  • Net weekly U.S. wheat sales totaled 57,500 MT for 2021-22, the second-lowest for the 2021-22 marketing year. Sales were down 92% from the previous week and down 83% from the prior four-week average.
  • Exports of 383,600 MT were up 6% from the previous week and up 26% from the prior four-week average. Sales for 2021-22 were expected at 200,000 to 675,000 MT.
  • Little precipitation is expected in the U.S. Plains HRW belt the next two weeks, leading to a continuation of drought conditions, World Weather Inc. said. Southern areas may receive snow today, but “the general pattern of unusual dryness will continue. The need for greater moisture will be increasing later this month as spring gets closer.”
  • Japan purchased 53,957 MT of wheat from its weekly tender, including 26,807 MT from Canada and 27,150 MT from Australia.
  • March SRW wheat fell as low as $7.40, the lowest intraday price since $7.37 on Jan. 14. Key support is seen at the January low of $7.35 1/2. March HRW fell as low as $7.53 1/4, the lowest since $7.45 on Jan. 18, before rebounding.

Live cattle futures have rebounded to a slightly firmer bias at midmorning. Feeder cattle are also mostly higher.

  • Live cattle have rebounded from initial declines on strong technicals and firmer cash prices. Feeder cattle are drawing support from a setback in corn prices.
  • USDA reported live steers at an average of $139.96 through yesterday morning, up about $3.00 from last week’s average. Cash trade around $140 is being reported in the Southern Plains this morning.
  • Slumping wholesale beef is limiting futures upside. Choice cutout values fell $2.29 yesterday to $283.15, near a three-week low and reflecting packers’ cutting prices to stir retail demand.
  • USDA reported net weekly U.S. beef sales of 20,100 MT for 2022, up from 14,300 MT the previous week. Lead buyers included Japan (11,800 MT, including decreases of 600 MT), South Korea (3,500 MT, including decreases of 800 MT) and Taiwan (1,600 MT, including decreases of 100 MT).
  • April live cattle fell as low as $145.80 but have bounced back to push above yesterday’s contract high at $146.95. A break above resistance at the contract high may have bulls targeting resistance at $150.00. Initial support is placed at yesterday’s low of $145.475.

Lean hog futures are sharply higher in all but the February contract and posting fresh contract highs.

  • April lean hog futures hit a contract high for the third day in a row on firmer cash and signs meatpackers are returning to normal processing levels after Covid-related slowdowns last month.
  • The CME Lean Hog Index is up 15 cents to $83.29, the highest since Oct. 21.
  • Pork cutout values rose firmed $3.47 yesterday to an average of $96.44, led by a gain of over $10 in hams. Movement totaled about 295 loads. Packers are reducing wholesale beef prices to move product, but pork demand seems to be strong enough to support current prices.
  • Net weekly pork sales totaled 30,400 MT for 2022, down from 49,100 MT the previous week. Lead buyers included Mexico (20,700 MT, including decreases of 300 MT), Japan (6,000 MT, including decreases of 700 MT) and Canada (1,500 MT, including decreases of 400 MT).
  • April lean hogs reached a contract high at $100.90. Other contracts, including June, also posted contract highs, reflecting expectations for tighter supplies.
 

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