Market Snapshot | February 24, 2022

Corn futures are sharply higher at midmorning, led by old-crop contracts.

Nearby corn futures initially rose the daily 35-cent limit and surpassed $7.00 for the first time since July, following a wheat market rally after Russia’s invasion of Ukraine exacerbated fears of disruptions to the grain trade and the global economy. Futures have backed off limit up but remain sharply higher.
U.S. farmers will reduce corn plantings this year as high prices for fertilizer and other crop inputs favor soybeans, USDA said today at its annual Outlook Forum. Corn plantings are projected to decline to 92.0 million acres from 93.4 million in 2021.
May corn futures overnight rallied to a contract high at $7.16 1/4, while March futures reached $7.18 3/4, the highest intraday price for nearby contract since $7.50 1/2 on July 13. New-crop December corn notched a contract high at $6.46 1/4.
Based on continuation charts, upside targets in nearby corn include the July 2021 high, as well as the May 2021 high at $7.75.

Soy complex futures are mixed after soybeans and soymeal erased an overnight rally and turned lower; nearby soyoil is around 250 points higher.

Nearby soybean futures overnight rose above $17.00 for the first time in nearly 9 1/2 years as the soy complex joined a rally in corn and wheat. Soybeans have since trimmed gains and fell to losses.
Soyoil futures reached the highest levels since at least 1973 amid concerns over reduced global edible oils exports. Ukraine and Russia account for nearly 80% of global supplies.
May soybeans reached $17.59 1/4, a contract high for the third straight day, while March futures hit $17.65, the highest for a nearby contract since September 2012. November soybeans posted a contract high at $15.55 before turning lower.
Soybean plantings are expected to rise to 88.0 million acres from 87.2 million last year, USDA said at its Outlook Forum. The projected increase reflects a response to sharply higher soybean prices due to drought-driven crop shortfalls in South America.
China’s soymeal prices rallied to a record today amid worries over tight supplies in the market even as the government plans to release soybeans from state-owned reserves. Dalian soymeal futures rose 5% to hit 4,064 yuan ($643) per MT.

Wheat futures are sharply higher, led by daily-limit gains in HRW and SRW contracts.

Cattle futures are sharply lower at midmorning, led by declines in feeder cattle.

Soaring corn prices sent nearby feeder cattle near a four-month low.
Live cattle futures extended a two-week slump and fell to a four-week low amid sagging wholesale beef and indications the market has established a near-term top.
Cash cattle have traded about $2 higher than last week, though volume has been light ahead of Friday’s USDA Cattle on Feed Report. With relatively tight market-ready cattle supplies, feedlots are optimistic for stronger prices, but packers may be reluctant to raise bids.
Choice beef cutout values fell 76 cents yesterday to $260.88, the lowest daily average since mid-December, though movement was strong at 196 loads.
April live cattle broke under the 50-day moving average, currently around $143.60, for the first time in nearly a month and fell as low as $142.60, the lowest intraday price since Jan. 28.
With charts eroding rapidly, bears may be targeting key support including the 100-day moving average at $141.65 and the January low at $139.025.

Lean hog futures are lower, led by sharp losses in the April contract.

Lean hog futures are under followthrough technical pressure from yesterday’s key bearish reversal in the April contract, a warning sign of a top.
The CME lean hog index remains strong but is showing signs of plateauing. The index is unchanged at $98.16 after a near-uninterrupted climb most of this month. The cash benchmark is still at the highest level since Sept. 7 and up over $26 this year.
Wholesale pork appeared to stabilize from a recent slide. Pork cutout values rose 36 cents yesterday to $109.12, though movement was light at 248 loads.
Today’s losses, if sustained, would appear to confirm yesterday’s key reversal lower in April lean hogs, signaling a market peak has been established and further price downside ahead.
April futures briefly fell under the 10-day moving average at $106.10 before finding support. Further support is seen at the Feb. 8 high of $104.675 and the 20-day moving average at $102.55.

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