Market Snapshot | March 8, 2022

Corn futures are lower at midmorning, with old-crop contracts down 4 to 8 cents.

• Corn futures are under profit-taking pressure as the wheat market drops sharply. Concerns over grain trade disruptions from Russia’s invasion of Ukraine are underpinning prices and limiting losses.
• Rising corn and wheat prices have encouraged Brazilian exporters to recently book corn and wheat shipments, despite tight supplies and strong domestic prices. Export sources told Reuters about 500,000 MT of Brazilian corn was booked for export out of Parana, while 100,000 MT of wheat was sold from Rio Grande do Sul.
• Crop Consultant Dr. Michael Cordonnier made no changes to his South American crop estimates this week. He projects corn production in Argentina and Brazil at 49 MMT and 112 MMT, respectively.
• May corn fell as low as $7.28 3/4 overnight but have recovered most of those declines after reaching $7.80 1/4 yesterday. Additional losses in wheat futures may add further pressure to corn, with funds still holding a large net long position.
• Initial support in May futures is seen at the 10-day moving average at $7.17, followed by $7.00. Friday’s contract high at $7.82 1/2 marks key resistance.

Soy complex futures are broadly higher, with nearby soybeans up more than 30 cents, nearby soymeal up over $14 and May soyoil up around 90 points.

• Nearby soybeans climbed as drought in South America continued to push export demand to the U.S. USDA’s Supply and Demand Report is widely expected to include further reductions in crop estimates for Argentina and Brazil.
• China continued 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 during the 2022-23 marketing year and 126,000 MT to “unknown destinations” for 2021-22. Since Jan. 28, USDA has reported a combined 6.22 MMT of soybean sales to China or unknown destinations, a more than nine-fold increase from the previous month.
• Cordonnier maintained his projection for Brazil’s soybean crop at 124 MMT. He also kept production estimates for Argentina and Paraguay unchanged, at 39 MMT and 5 MMT, respectively.
• May soybean futures rose as high as $16.99 3/4 but continue to face strong resistance at the $17.00 level. The most-active contract failed to take out that resistance in four of the previous five sessions, suggesting the market may be establishing a near-term top.

Wheat futures are sharply lower, led be losses of 70 cents to $1 in nearby winter wheat contracts.

• Winter wheat fell for the first time in seven sessions in volatile trade as the market monitors the war in Ukraine. May SRW wheat overnight posted a contract high for the sixth day in a row before corrective selling emerged.
• USDA reported a daily sale of 193,000 MT of hard red spring wheat for delivery to the Philippines in 2022-23. That was the first daily sale of U.S. wheat since Feb. 22.
• Soaring prices are deterring some global buyers. Tunisia rejected all offers in a tender to buy 125,000 MT of milling wheat and 100,000 MT of feed barley because prices were too high.
• May SRW wheat posted a contract high at $13.63 1/2 overnight before quickly dropping as low as $12.02 and filled gaps from Monday and last Friday. May HRW is trading in a range of $1.28 1/4.
• May spring wheat reached $12.11 3/4, a contract high for the fourth day in a row, before reversing sharply lower.

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

• Feeder cattle extended sharp gains from yesterday, boosted by weakness in the corn market.
• Live cattle futures also extended yesterday’s corrective bounce amid ideas the market may be near a short-term bottom following sharp declines the past two weeks. Demand concerns remain over high retail prices and the Russia/Ukraine war, but retailers may step up buying soon for post-Lent features.
• Choice cutout values rose 38 cents yesterday to $254.71, up from an 11-month low at the end of last week. Movement totaled 102 loads.
• Cash cattle averaged $140.61 last week, down $2.61 from the previous week and the first weekly decline in the past five.
• April live cattle rose as high as $139.475 and are up from a six-month intraday low of $133.50 posted March 4.

Lean hog futures are higher at midmorning.

• Hog futures are higher in a technical recovery from yesterday’s drop to four-week lows. Gains may be little more than a corrective bounce, given signs of a cash market top and expectations for seasonal weakness.
• The CME lean hog index is down 29 cents today (as of March 4) to $99.28, the third consecutive daily decline. Seasonally, hog prices typically weaken in late winter before rallying to a summertime high.
• Pork carcass cutout values jumped $2.66 yesterday to $106.65, led by gains in hams. Movement was decent at 311 loads.

• April lean hog futures rose as high as $103.575, up from a four-week low of $98.475 yesterday. Initial resistance is seen at the 10- and 20-day moving averages at $104.085 and $104.80, respectively.