Market Snapshot | February 28, 2022

Corn futures are sharply lower at midmorning, led by gains of 31 to 32 cents in old-crop contracts.

• Corn futures followed wheat higher on concerns Russia’s war with Ukraine may disrupt the global grain trade, including exports out of the Black Sea region. Combined, Russia and Ukraine account for nearly one-fifth of world corn exports.
• USDA reported 1.544 MMT (60.8 million bu.) of corn inspected for export during the week ended Feb. 24, down from 1.578 MMT the previous week. Expectations ranged from 1 MMT to 1.7 MMT. Inspections are running 11.6% behind year-ago, wider than the 10.6% gap last week. USDA projects corn exports in 2021-22 at 2.425 billion bu., 11.9% below the previous marketing year.
• Corn futures will likely follow the lead of wheat this week and will also be influenced by speculative money flow.
• May corn futures rose as high as $6.88 1/2 overnight and are trading within Friday’s wide range. The market likely needs a continued rally in wheat to test the contract high of $7.16 1/4 posted Feb. 24. Initially support comes in around Friday’s low at $6.55 1/4.

Soy complex futures are sharply higher, with nearby soybeans up 47 to 48 cents, nearby soymeal up nearly $8 and nearby soyoil up over 200 points.

• Soybean futures rebounded from sharp declines Friday as wheat futures rallied on the Russia/Ukraine conflict. Ukraine is the world’s largest producer and exporter of sunflower seeds and sunflower oil, a competitor to soybean oil.
• USDA reported daily soybean sales of 120,000 MT to “unknown destinations” during the 2021-22 marketing year and 136,000 MT for delivery to China during 2022-23.
• Today’s sales added to a four-week string of purchases. Since Jan. 28, USDA has reported a combined 4.67 MMT of soybean sales to China or unknown destinations, a seven-fold increase from the pace over the previous month.
• USDA reported 735,278 MT (27 million bu.) of soybeans inspected for export during the week ended Feb. 24, down from 1.043 MMT the previous week. Expectations ranged from 500,000 MT to 1.1 MMT.
• Large speculators increased their bullish bets in the soybean market for the fifth straight week, according to the CFTC’s Commitments of Traders report. The managed money net long in soybean futures and options increased 4,962 contracts to 180,334 contracts for the week ended Feb. 22, the highest since the week ended May 11.
• Wheat futures and speculative money flow will drive soy complex direction this week. Nearby soybeans pulled back sharply after briefly pushing above $17.00 last week, which suggests the market has reached an exhaustion point.

Wheat futures are sharply higher, with nearby HRW and SRW contracts soaring over 45 cents.

• Wheat futures surged overnight and sustained gains through midmorning, as escalating Russia/Ukraine concern sparked a rebound from steep declines Friday.
• Egypt's state grains buyer cancelled an international tender for wheat for shipment between April 13-26 with no purchase made. An unusually low number of three trading houses were said to have participated in the tender because of the supply uncertainty and market turbulence following Russia's invasion of Ukraine, Reuters reported.
• USDA reported 406,138 MT of wheat (14.9 million bu.) inspected for export during the week ended Feb. 24, down from 570,859 MT the previous week. Expectations ranged from 300,000 to 625,000 MT.
• Russia’s wheat export tax dropped for the seventh consecutive week. The price for March 2-8 will be $88.20 per MT, based on an indicative price of $326.10 per MT and is down from the peak rate $98.20 per MT in mid-January.
• Large speculators cut their bearish bets in SRW wheat for the first time in four weeks, CFTC data showed. The managed money net short in SRW wheat decreased 16,605 contracts during the week ended Feb. 22 to 18,053 futures and options contracts.
• May SRW futures rose as high as $9.34 3/4 overnight after posted a contract high at $9.60 3/4 on Friday. Nearby SRW futures on Friday hit the highest price in nearly 14 years.

Cattle futures are mostly lower at midmorning, with live cattle near one-month lows.

• Live cattle futures extended last week’s declines amid wholesale beef market weakness and signs the market established a near-term top.
• Feeder cattle futures sank to the lowest levels since mid-November as corn prices rallied.
• USDA’s Cattle on Feed Report released after the close Friday was largely price-neutral, meaning market focus will center on money flow, technicals and outside markets. USDA estimated 1.999 million head of cattle were sent to feedlots during January, down 1.2% from the same month in 2021 and larger than expectations for a decline of about 0.8%.
• Concerns over spring demand are weighing on futures despite cash cattle strength. Live steers last week averaged around $143.40, up from $142.36 last week.
• Choice cutout values fell 97 cents Friday to $258.27, down $7.58 for the week and near an 11-month low.
• April live cattle fell as low as $140.925, the lowest intraday price since $140.475 on Jan. 26. A weak close today may prompt bears to target the January low at $139.025. The February live cattle contract expires today.

Lean hog futures are mixed, with the nearby April contract lower and deferreds higher.

• April lean hogs extended last week’s sharp declines and fell near a two-week low, while a tight longer-term supply outlook underpinned deferred futures.
• Cash fundamentals remain strong, with the CME lean hog index up 36 cents to $98.40, the highest since Sept. 7.
• Wholesale pork has also been strong. Pork cutout values ended Friday at $113.32, up $3.41 for the week.
• Active followthrough selling early this week would confirm a deeper corrective pullback is underway, but a return of buyers would signal last week’s pullback was likely a correction in a bull market.
• April lean hogs fell as low as $103.10, the lowest intraday price since $102.075 on Feb. 15. A weak close may have bears targeting support at the Feb. 14 low of $101.00.