Market Snapshot | March 7, 2022

Corn futures are mixed, with nearby contracts erasing overnight gains and trading around a dime lower.

• Nearby corn came under profit-taking pressure after following wheat futures higher overnight.
• USDA reported 1.582 MMT (62.3 million bu.) of corn inspected for export during the week ended March 1, up from 1.555 MMT the previous week. Expectations ranged from 1 MMT to 1.65 MMT. Inspections are running 11.3% behind year-ago, compared to 11.6% behind last week.
• Large speculators slightly reduced bullish bets in the corn market in late February, according to the latest Commitments of Traders data. The managed money net long fell 5,214 futures and options contracts during the week ended March 1 to 349,222 contracts.
• May corn futures overnight reached $7.80 1/4 before fading. The contract high posted Friday at $7.87 1/4 marks initial resistance, followed by $8.00. Beyond $8.00, the upside target for bulls would be the all-time high of $8.43 3/4 from 2012. Support is seen at the March 1 high of $7.25 3/4, with backing from psychological support at $7.00.

Soy complex futures are mixed, with nearby soybeans higher but down from overnight gains.

• Nearby soybeans gained support from rallying wheat and supply disruptions that sparked a surge in export business early this year.
• China extended a string of U.S. soybean purchases that began in late January. USDA reported daily soybean sales of 132,000 MT for delivery to China, equally divided between 2021-22 and 2022-23. Since Jan. 28, USDA has reported a combined 5.96 MMT of soybean sales to China or unknown destinations, a nearly-fold increase from the pace over the previous month.
• USDA reported 766,250 MT (28.2 million bu.) of soybeans inspected for export during the week ended March 1, up from 738,266 MT the previous week. Expectations ranged from 400,000 MT to 1.475 MMT.
• AgRural lowered its estimate for Brazil’s soybean crop to 122.8 MMT from 128.5 MMT in early February as private forecasters continued to scale back South American crop expectations due to drought. USDA will update its Brazilian crop forecasts Wednesday and Conab will release revised official crop estimates Thursday.
• Large speculators reduced their bullish bets in soybeans for the first time in six weeks. The managed money net long fell 4,613 contracts to 175,721 contracts for the week ended March 1, CFTC data showed.
• May soybeans reached $16.96 3/4 overnight before cutting gains. The most-active contract has failed at chart resistance just under $17.00 the previous three sessions, suggesting the market may be establishing a near-term top.

Wheat futures are higher but mostly off overnight gains.

• May SRW futures remain locked limit-up at 85 cents higher, but deferred contracts are trading. HRW futures have also retreated from limit-up gains overnight.
• The normal daily trading limits for SRW and HRW wheat futures traded at the Chicago Board of Trade have been increased to 85 cents, up from 50 cents previously. The daily limit after a limit-up close the previous day will expand to $1.30. The new limits will remain in place until the exchange conducts its next semi-annual reset in May.
• USDA reported 343,463 MT (12.6 million bu.) of wheat inspected for export during the week ended March 1, down from 429,984 MT the previous week. Expectations ranged from 300,000 to 500,000 MT.
• Large speculators sharply cut their bearish bets in SRW wheat for the second week in a row, CFTC data showed. The managed money net short in SRW wheat decreased 11,017 futures and options contracts during the week ended March 1 to 7,036 contracts
• May SRW wheat are locked at the contract high of $12.94. The most-active SRW contract gained $3.50 last week. May HRW futures posted a contract high at $12.99 1/2 after gaining $3.14 last week.
• May spring wheat reached $12.07, a contract high for the fourth day in a row.

Cattle futures are higher at midmorning, led by feeder contracts.

• Live cattle futures rose in a corrective rebound from sharp declines to five-month lows last week. Futures are oversold and due for a correction higher but concerns with demand continue to hang over the market.
• Feeder cattle are gaining support from weakness in the corn market.
• Choice cutout values ended last week at $254.33, an 11-month low and a drop of nearly $4.00 from a week earlier.
• Live steers last week averaged $140.48 through Friday morning, down from the previous week’s average of $143.22.
• April live cattle are trading within Friday’s wide range after dropping $6.15 last week. A push under Friday’s intraday low of $133.50 may have bears targeting the September low at $132.975. Resistance is seen at $140.45.

Lean hog futures are lower at midmorning.

• Hog futures are under followthrough pressure from Friday’s limit-down close, which further weakened the market’s technical posture, and signs of a cash market top.
• The CME lean hog index fell 13 cents to $99.57, the second straight decline and a signal the cash market has posted a late-winter top.
• Pork carcass cutout values fell $2.42 Friday to a three-week low of $103.99, down nearly $10 for the week.
• USDA estimated last week’s slaughter at 2.427 million head, down 69,000 head from the previous week and down 130,000 head from the same week in 2021.
• China will buy 38,000 MT of pork for state reserves on Thursday. Beijing started buying domestic pork for state reserves last week to support falling hog prices.
• April lean hog futures fell as low as $99.30, the lowest intraday price since $97.90 on Feb. 4. Initial support is seen at the 40- and 50-day moving averages around $98.75 and $96.50, respectively.