Market Snapshot | March 16, 2022

Corn futures are 18 to 27 cents lower at midmorning.

• Nearby corn futures dropped to the lowest levels in almost a week as prospects for a ceasefire between Russia and Ukraine sent wheat prices down sharply.
• Ukraine and Russia reportedly have made “significant” progress on a tentative 15-point neutrality plan to end the war. The plan includes a ceasefire and Russian withdrawal if Kyiv declares neutrality and accepts limits on its armed forces.
• Ethanol production during the week ended March 11 averaged 1.028 million barrels per day (bpd), down 2,000 bpd from the previous week but up 5.9% from the same week in 2021, according to the Energy Information Administration.
• Ethanol stocks rose 674,000 barrels to 25.945 million barrels, the highest since the week ended April 24, 2020.
• Iran tendered to buy 60,000 MT each of corn, soymeal and feed barley.
• May corn fell as low as $7.31, the lowest intraday price since $7.29 on March 10 and just above initial support at last week’s low of $7.28 3/4.

Soybeans are 8 to 14 cents lower, nearby soymeal is more than $6 lower and nearby soyoil is around 20 to 40 points lower.

• Soy complex futures are under pressure from a selloff in the wheat market and weakness in crude oil, which has tumbled more than $30 from a 14-year high around $130 last week. Lack of fresh export business from China added to the bearish backdrop.
• Yesterday’s NOPA report showed January soybean crush at 165.1 million bu. last month, down 9.4% from January but up 6.4% from February 2021. The numbers imply the full February U.S. crush at 175.0 million bushels.
• For the first six months of the marketing year, we estimate U.S. crush at 1.119 billion bu., up from 1.113 bullion bu. for the same period last year. Board crush margins currently are extremely strong throughout the 2021-22 crop year, which would incentivize much greater crush results through summer.
• May soybean futures fell as low as $16.47 1/4. Yesterday’s low at $16.38 is initial support, followed by the March low at $16.34 1/2.

Wheat futures are sharply lower in light volume, with front-month winter wheat down the 85-cent limit. Nearby spring wheat futures are down their 60-cent daily limit.

• Wheat futures nosedived amid optimism a potential ceasefire between Russia and Ukraine would eventually allow Black Sea region grain shipments to return to normal.
• Trading volume during this morning’s sharp extension of overnight losses is light.
• The area sown with Ukraine's 2022 spring grain crops could fall 39% to 4.7 million hectares due to Russia’s military invasion, the APK-Inform agriculture consultancy said yesterday. The country, which harvested a record 86 MMT of grain in 2021, sowed 7.7 million hectares of spring grains last year.
• May SRW wheat is down the 85-cent daily limit, dropping to $10.69 1/4. May HRW also fell the 85-cent limit, dropping to $10.72 1/2.

Feeder cattle futures are firmer at midmorning, while live cattle are mixed.  

• Feeder cattle futures are being supported by weakness in the corn market.
• Live cattle futures initially jumped to a two-week high on optimism cash prices will halt a recent slide, though buyer interest is light as traders await actual cash cattle trade.
• Packers have yet to establish this week’s bids, but feedlots are reportedly asking $3 to $4 more and general expectations are cash will eventually rise $1 to $2 from last week’s average of $138.30.
• Choice cutout values rose $2.39 yesterday to $257.90, the highest daily average since Feb. 25. Movement totaled 135 loads.
• June live cattle reached $137.60, the most-active contract’s highest intraday price since $137.90 on March 2. Upside targets include the 50-day moving average at $138.10 and the March high at $138.65.

Lean hog futures are mixed after a firmer tone earlier in the day.

• April lean hogs gapped higher and neared a two-week high on firm cash fundamentals before pulling back to near unchanged.
• The CME lean hog index dropped 36 cents to $100.49, but is still near a six-month high reached earlier this week.
• Pork carcass cutout values rose $1.29 yesterday to $104.48 as primal hams gained over $12, indicating retailers are stocking up ahead of Easter April 17. Movement was strong at 375 loads.
• April lean hogs reached $104.70, the contract’s highest intraday price since $107.45 on March 3. The opening surged left a gap between yesterday’s high at $102.725 and today’s low of $103.20. Upside targets for bulls include filling a remaining gap under $105.50 posted March 4.