Market Snapshot | March 1, 2022

Corn futures are sharply higher at midmorning, with most-active May up the daily 35-cent limit.

• Corn futures continued to follow wheat higher on concerns Russia’s war with Ukraine will disrupt the global grain trade. Combined, Russia and Ukraine account for nearly one-fifth of world corn exports.
• Prices were also supported by unconfirmed market talk that China booked up to 10 cargoes of U.S. corn yesterday amid disruptions to shipments out of Ukraine. If China bought corn, the purchases should be confirmed through daily USDA sales announcements later this week.
• Crop Consultant Dr. Michael Cordonnier left his South American crop estimates unchanged, saying weather the past couple weeks has improved enough to stabilize crops. Cordonnier estimates corn production for Argentina and Brazil at 49 MMT and 112 MMT, respectively.
• This afternoon’s Grain Crushings Report from USDA is expected to show corn-for-ethanol use during January declined 13.8 million bu. (2.8%) from December to 472 million bu., though that would be up 14% from last year.
• Taiwan tendered to buy 65,000 MT of corn to be sourced from the U.S., Brazil, Argentina or South America.
• May corn futures gapped higher overnight and rose the 35-cent limit to $7.25 3/4, topping the previous contract high of $7.16 1/4 reached Feb. 24. Based on continuation charts, bulls will be targeting the July high at $7.50 1/2 and the May high at $7.75.

Soy complex futures are sharply higher, with May soybeans up around 44 cents, May soymeal up more than $5 and nearby soyoil more than 300 points higher.

• Soybean futures joined rallying wheat and corn futures amid concerns over disruption to global vegetable oil supplies. Ukraine is the world’s largest producer and exporter of sunflower seeds and sunflower oil, a competitor to soybean oil.
• Palm oil has become the costliest among four major edible oils for the first time as buyers rush to secure replacements for sunflower oil shipments from the top exporting Black Sea region that were disrupted by Russia’s invasion of Ukraine, Reuters reported.
• The Black Sea accounts for 60% of world sunflower oil output and 76% of exports. Ports in Ukraine will remain closed until the invasion ends.
• USDA reported a daily soybean sale of 264,000 MT for delivery to China during the 2022-23 marketing year, the latest in a month-long flurry of purchases. Since Jan. 28, USDA has reported a combined 4.934 MMT of soybean sales to China or unknown destinations, a more than seven-fold increase compared to the sales the previous month.
• Cordonnier left his Argentina and Brazil soybean crop estimates unchanged at 124 MMT and 39 MMT, respectively. “The weather over the last several weeks has improved, and the improvement is most important for the later-plated soybeans, especially in northern Argentina,” Cordonnier said.
• USDA’s Oilseed Crushings Report is expected to show U.S. soybean crushing during January totaled 193.7 million bu., which would be down 4.5 million bu. (2.3%) from December’s record and 2.8 million bu. (1.4%) below last year.
• May soybeans rose as high as $16.97 1/2, surpassing the intraday highs of the previous two sessions but short of the contract high of $17.59 1/4 reached Feb. 24. March soybeans reached $17.09, after posting a 9 1/2-year high at $17.65 Feb. 25.

Wheat futures are sharply higher, with nearby HRW and SRW contracts trading at the daily 50-cent limit.

• Wheat futures maintained overnight strength as May HRW and SRW markets notched fresh contract highs on the escalating Russia/Ukraine conflict. Nearby SRW futures are approaching 14-year highs.
• Halted exports out of Ukraine and expectations Russian shipments out of the Black Sea will be impacted somewhat are price-supportive as global end-users will need to find alternative supplies.
• Japan is seeking 83,136 MT of U.S. wheat in its weekly tender. Tunisia tendered to buy 75,000 MT of optional origin durum wheat.
• May SRW futures rose to a contract high at $9.84 overnight while nearby March touched $9.78 1/2, the highest for a nearby contract since April 2008.
• May HRW hit a contract high at $10.03, while nearby March touched $10.14 1/4, near an 11-year high.

Live cattle futures are mixed at midmorning while feeder cattle are lower.

• Feeder cattle futures sank to the lowest levels since mid-November as corn prices extended a rally above $7.00.
• Nearby live cattle futures extended recent declines as a wholesale beef market slump fuels ideas the market established a near-term top, while the Russia/Ukraine war stirs concerns over beef demand.
• While cash cattle have continued to strengthen, wholesale markets continue to erode. Choice beef cutout values fell 76 cents yesterday to an 11-month low at $257.51. Movement was light at 85 loads.
• Last week’s average live steer price was $143.22, up 86 cents from a week earlier and the fourth consecutive weekly gain.
• April live cattle are trading inside yesterday’s range, with initial support seen at yesterday’s low of $140.25. A weak close today may have bears targeting the January low at $139.025.

Lean hog futures are sharply higher.

• Hog futures rose for the first day in five in a corrective bounce from sharp recent declines, with firm cash fundamentals providing support.
• Cash fundamentals remain strong, with the CME lean hog index up 69 cents today to $99.09, near a six-month high and about $6.40 below April futures.
• Pork cutout values fell yesterday $1.05 to $112.27, led by a drop of nearly $12 in primal hams. Movement totaled 274 loads.