Market Snapshot | February 15, 2022

Corn futures are 10 to 17 cents lower at midmorning.

• Corn futures extended overnight declines on spillover weakness from slumping wheat and outside markets, with Nymex crude oil plunging over $4.
• Adverse weather in South American growing regions has been brushed aside for now as crop losses are likely factored in to current futures levels.
• Crop Consultant Dr. Michael Cordonnier kept his Brazilian corn crop estimate at 112 MMT but cut his Argentine corn crop forecast by 1 MMT to 50 MMT. For all of South America, Cordonnier forecasts corn production at 168 MMT, which would be up 24.6 MMT (17.2%) from last year.
• Fund long liquidation accelerated across the grain markets, sending March corn down as low as $6.36 1/4, the lowest since Feb. 9. Further declines would reinforce ideas corn established a near-term top at last week’s contract high of $6.62 3/4.
• March futures have held initial support around the 10-day moving average of $6.36. Further support is seen at last week’s low of $6.24 3/4.

Soy complex futures are broadly lower, though well off their intra-day lows. Soybeans are 10 to 12 cents lower, with soymeal down more than $4 and soyoil is around 30 points lower.

• March soybeans fell to the lowest levels in over a week as eroding technicals spurred fund liquidation. Crop losses in South America have likely been priced in, and continued weakness would strongly suggest the market established a near-term peak with the nine-month highs last week.
• USDA reported daily sales of 101,000 MT of soybeans for delivery to Mexico, including 53,500 MT for 2021-22 and 47,500 MT for delivery during 2022-23.
• Cordonnier slashed his Brazilian soybean crop estimate by 6 MMT to 124 MMT, saying conditions in southern Brazil are worse than expected and there may be additional yield losses due to drought. He also lowered his Argentine soybean crop forecast by 2 MMT to 40 MMT.
• “Record high or near record high temperatures coupled with scant rainfall over the past several months have resulted in a catastrophe for soybean producers in southern Brazil and the growing season is not over,” he said in a weekly report.
• NOPA to is expected to report January soybean crush at 186.7 million bu., based on a Reuters survey. If realized, that would top the record crush of 186.4 million bu. in December and be up 1.1% from last year. Soyoil stocks at the end of January are expected to rise to 2.062 billion lbs., which would be up 1.5% from December and 14.6% above last year.
• March soybeans fell as low as $15.42 1/2, the lowest intraday price since $15.32 on Feb. 4. Initial support is seen at the $15.26 to 15.29 level and the 20-day moving average at $15.04 1/2.

Wheat futures are sharply lower, led by declines of 20-plus cents in the winter wheat markets.

• Winter wheat futures are under pressure from technical selling and general weakness across the commodity sector today. Signs of easing Russia/Ukraine tensions are also weighing on prices.
• SovEcon raised its 2022 Russian wheat crop forecast by 3.6 MMT to 84.8 MMT, citing favorable weather conditions.
• Japan is seeking to buy 54,692 MT of U.S. milling wheat in its weekly tender. South Korea tendered to buy 82,000 MT of U.S. or Canadian wheat.
• March SRW futures fell as low as $7.73, nudging slightly under support at the 10- and 50-day moving averages. An extended push lower would have bears targeting last week’s low at $7.54.

Cattle futures are firmer at mid-morning, led by feeders.

• Live cattle futures rose for the second straight session on recent firmness in the cash market and a longer-term bullish technical posture.
• Packers have accelerated slaughter of late but continue to cut beef prices in efforts to stir retail demand. Choice cutout values fell 56 cents yesterday to $273.96, a five-week low. Movement was light at 76 loads.
• Last week’s average live steer price of $140.48 rose 72 cents from the previous week but wasn’t as high as some anticipated. Cash trade may not be established until around midweek.
• March feeder cattle reached a six-week high behind a selloff in corn futures.
• April live cattle rose as high as $147.475. Upside targets include the $148.70 contract high posted Feb. 10. Initial support is seen at yesterday’s low of $145.275.

Lean hog futures are firmly higher.

• Hog futures rose for a second consecutive day behind cash market strength and bullish technicals in the wake of the steep rally over the past month, but the market remains oversold and vulnerable to further correction.
• The CME lean hog index is up $1.59 to $90.51, the highest since Oct. 8. April hogs assume lead-month status at nearly a $12 premium to the cash index, reflecting expectations for a much-stronger-than-normal seasonal rally.
• Pork cutout values fell $1.98 yesterday to $107.98, still near a fourth-month high posted Friday. Movement totaled 280 loads.
• April lean hogs rose as high as $105.10, a high for the week. Upside targets include the contract high of $107.70 reached Feb. 10, while initial support is seen at yesterday’s low of $101.00.