Market Snapshot | March 2, 2022

Corn futures are mixed at midmorning, with nearby contracts up sharply and deferreds lower.

• Nearby corn futures extended the recent rally on support from the wheat market as Russia’s invasion of Ukraine stoked concerns over disruptions to the global grain trade and talk of fresh export business for the U.S.
• USDA’s Grain Crushings Report yesterday afternoon showed U.S. corn-for-ethanol use during January totaled 474 million bu., down 3.9 million bu. from December but up 57 million bu. from the same month in 2021. Traders expected corn use to drop about 13.8 million bu.
• January marked the third consecutive month of a higher-than-expected corn grind for ethanol, implying the yield per bushel crushed was lower than levels the past three years.
• May corn futures overnight rose as high as $7.47 3/4, a contract high for the second day in a row. March corn touched $7.57, the highest for a nearby contract since May 2021.
• Based on continuation charts, bulls will target the May 2021 high at $7.75. Russia and Ukraine provide almost 20% of world corn exports.

Soy complex futures are lower, with old-crop soybeans down 14 to 20 cents.

• Soybean futures fell in a corrective, profit-taking setback following sharp recent gains. Soybeans are less of a factor in the Russia/Ukraine region compared with corn and wheat, though global vegetable oil supplies remain a concern.
• USDA reported daily soybean sales of 264,000 MT to “unknown destinations,” including 198,000 MT is for delivery during the 2021-22 marketing year and 66,000 MT for 2022-23. USDA also reported daily soybean sales of 266,000 MT to China, including 198,000 MT is for 2021-22 and 68,000 MT for 2022-23.
• Since Jan. 28, USDA has reported a combined 5.464 MMT of soybean sales to China or unknown destinations, a more than seven-fold increase compared to the sales the previous month.
• Reuters reported China booked at least five cargoes of U.S. old-crop soybeans for delivery in April-May, which is likely some of the daily sales. “While prices of U.S. and Brazil beans were almost the same, logistics for U.S. cargoes were faster,” one trader said.
• StoneX lowered its forecast for Brazil's 2021-22 soybean crop to 121.17 MMT, down 4.2% from its February projection as drought cut yield prospects.
• May soybeans fell as low as $16.55 3/4 overnight after surging 53 1/4 cents yesterday to $16.90.

Wheat futures are sharply higher, with May HRW and SRW contracts locked at the expanded 75-cent limit.

• Wheat futures posted fresh contract highs on the escalating Russia/Ukraine conflict, which has raised major concerns about the availability of supplies from the Black Sea region.
• “Global buyers of grains have been increasingly turning to the U.S., Europe or South America to secure supplies in the immediate term,” ING said in a note. “The demand for stockpiling has also increased due to the current uncertainty, as prolonged military action in the region could create long-term supply imbalances.”
• May SRW and HRW wheat posted contract highs for the second straight day, reaching $10.59 and $10.78, respectively. March SRW hit $10.53 1/2, the highest for a nearby contract since April 2008. May spring wheat hit a contract high at $11.09.

Live cattle futures are lower at midmorning, while feeder cattle are higher.

• Live cattle futures extended a slide to five-week lows on technical weakness and slumping wholesale beef. Additional pressure stemmed from concerns the Russia/Ukraine war will disrupt global beef demand.
• Feeder cattle futures posted a corrective bounce after sinking yesterday to four-month lows.
• 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.
• Packers have been reluctant to make initial bids for cash cattle, while feedlots are seeking $144 or higher for this week’s supplies.

Lean hog futures are lower at midmorning with moderate to sharp losses in most contracts.

• Hog futures fell for the fifth session in the past six after failing to generate followthrough buying from yesterday’s corrective bounce.
• The CME lean hog index is up another 57 cents to $99.66, the highest since Sept. 3. Pork cutout values, which had been strengthening, dropped $4.08 yesterday and are down nearly $6 from its Feb. 24 peak.
• While the pork cutout remains strong, price action the past three days signals some retailer resistance, especially to bellies and hams, as hams dropped sharply on Monday and bellies fell nearly $28 yesterday.