Market Snapshot | February 18, 2022

Nearby corn futures are 3 to 5 cents higher at midmorning.

• Corn futures climbed near highs for the week behind spillover support from gains in soybeans and wheat. Traders continue to monitor the Russia/Ukraine situation ahead of the three-day holiday weekend.
• Drought-stressed crops in South America may receive moisture relief in coming weeks, but it will likely come too late to prevent substantial yield losses in some areas.
• Overall improvements in crop conditions are expected during the next two weeks in the driest areas from Paraguay and Brazil’s Mato Grosso do Sul state and further south, with regular showers expected beginning Feb. 20 through Mar. 4, World Weather Inc. said today.
• “Most of the remainder of Brazil will receive enough rain during the next two weeks to support crop development while slowing fieldwork,” World Weather said.
• March corn futures rebounded from overnight declines and rose as high as $6.57 1/4 and are poised to end above last week’s close at $6.51. December corn reached $5.99, the second contract high posted this week. Initial support in March futures is seen at the 10-day moving average of $6.45 and yesterday’s low at $6.42 3/4.

Soy complex futures are broadly higher, with nearby soybeans up 6 to 7 cents, nearby soymeal up around $1 and nearby soyoil up nearly 70 points.

• Nearby soybean futures forged back above $16.00 to reach highs for the week on fresh export business and expectations crop shortfalls in South America will drive more overseas demand to the U.S.
• South America’s shrinking production outlook appeared to spark a flurry of purchases from China and others over the past three weeks. USDA today reported daily sales of 198,000 MT of soybeans for delivery to “unknown destinations,” including 66,000 MT is for delivery during the 2021-22 marketing year and 132,000 MT for 2022-23.
• Since Jan. 28, USDA has reported a combined 3.52 MMT of soybean sales to China or unknown destinations. By comparison, over the month prior to Jan. 28, sales to China and unknown destinations totaled just 648,000 MT.
• Indian traders have contracted to import a record 100,000 MT of soyoil from the U.S. because of limited supplies from drought-hit South America, Reuters reported. India, the world's biggest edible oil importer, traditionally buys soyoil from Argentina and Brazil.
• March soybeans reached $16.08 1/2, the contract’s highest intraday price since posting a contract high at $16.33 on Feb. 10. The lead contract is up from last week’s close at $15.83. November soybeans posted a contract high at $14.72.

Wheat futures are higher, led by gains of 15 to 16 cents in HRW contracts.

• Wheat futures remained supported by ongoing concerns a potential Russian invasion of Ukraine could disrupt the global trade, though the market has been receiving mixed signals on Russia’s intent.
• France’s ag ministry rated 95% of the country’s soft wheat crop as being in good/excellent condition, unchanged from the previous week and above 86% last year, though down slightly from 99% before winter.
• Taiwan purchased 54,920 MT of U.S milling wheat.
• March SRW wheat rose as high as $8.10 1/4 and is poised for a second straight weekly gain after ending last week at $7.97 3/4. Initial resistance is seen at this week’s high of $8.13 1/2. A breach of that level would have bulls targeting the January high at $8.31 1/2.

Cattle futures are mostly lower at midmorning.

• Live cattle futures are under mild corrective pressure as prices consolidated after last week’s rally to contract highs. Slumping wholesale beef prices are contributing to the softer tone.
• Cash cattle prices extended recent strength this week, but packers have most of their near-term needs covered and are now buying cattle for a couple weeks out, according to cash sources. That’s prompted some feedlots to pause on sales.
• USDA-reported live steers averaged $142.15 through yesterday morning, up $1.67 from last week’s average.
• Packers have been cutting wholesale beef prices to spur demand. Choice cutout values fell 3 cents yesterday to $269.59, a six-week low.
• April live cattle fell as low as $143.25 before rebounding and are currently slightly above last week’s close at $146.175.

Lean hog futures are firmer, posting contract highs.

• Hog futures gapped higher and rose a fifth consecutive day on continued cash fundamental strength. The CME Lean Hog Index is up 90 cents to $94.24, the highest since mid-September.
• Wholesale pork extended a month-long rally, as pork cutout values jumped $10.02 yesterday to $116.54, the highest daily average since late August. Primal hams soared over $25 to lead gains, and movement totaled 316 loads.
• April lean hog futures rose as high as $109.825, a contract high and the highest intraday price since the market surpassed $110.00 in August. The April contract is also up from $102.225 at the end of last week. Deferred contracts such as June also posted new highs.
• The April contract’s strong open left a gap between yesterday’s high at $108.075 and today’s low at $108.475, which now marks initial chart support.