Market Snapshot | March 18, 2022

Corn futures are 8 to 14 cents lower in old-crop contracts at midmorning.

• Nearby corn futures extended overnight declines amid spillover from slumping wheat markets and pre-weekend profit-taking as traders continued to monitor Russia’s war with Ukraine.
• Ukraine warned the World Trade Organization (WTO) it may have to limit exports of agricultural products to ensure domestic food supplies, Geneva trade officials reported from the meeting this week of the WTO Committee on Agriculture.
• Potential for major flooding in the Red River Valley and continued snow cover across Minnesota and North Dakota could delay planting across the region for weeks, U.S. government forecasters said yesterday. Heavy snow and saturated soils mean the Red River will likely see the worst flooding this spring.
• May corn is on track for a weekly decline after ending last week at $7.62 1/2 and appears to be forming a potentially bearish flag pattern on the daily chart. Initial support is seen at this week’s low of $7.26 3/4.

Nearby soybeans are 11 to 15 cents lower, nearby soymeal is nearly $2 lower and nearby soyoil nearly 300 points lower.

• Nearby soybeans erased overnight gains amid weakness in grains and a plunge in Malaysian palm oil. Soybean export demand appears to be slowing, with USDA reporting uninspiring weekly sales yesterday and China pulling back from a recent buying spree.
• Malaysian palm oil posted a 16% weekly decline, its largest since 1986, after Indonesia abandoned export volume curbs.
• Indonesia raised its maximum palm oil export levy to $375 per MT from $175 per MT as the world’s top exporter of the edible oil stepped up efforts to stanch soaring domestic prices.
• May soybeans are poised for a weekly decline after ending last week at $16.76. A push under this week’s low of $16.38 may compel bears to target the March low at $16.34 1/2 and the psychologically key $16.00 level.

Wheat futures are sharply lower, led by declines of around 35 cents in nearby SRW contracts.

• Wheat futures extended overnight losses on pre-weekend profit-taking and expectations precipitation forecast for the U.S. Plains will aid parched crops. Wheat futures appear to have established major tops, but the Russia/Ukraine war likely will limit price downside over the near-term.
• A large storm system late Sunday through Tuesday will bring the HRW region a “much needed significant precipitation event,” World Weather Inc. said today. The precipitation “is likely to put a dent in the ongoing drought; however, drought conditions will remain, especially in southwestern areas where extreme to exceptional drought conditions are ongoing.”
• Russia’s wheat export tax for March 23-29 will be $86.40 per MT, based on an indicative price of $323.50 per MT, up 10 cents from the previous week. The tax had dropped nine consecutive weeks.
• About 92% of French soft wheat crops were in good or excellent condition as of March 14, unchanged from a week earlier and above a year-ago rating of 87%, farm office FranceAgriMer said today.
• May SRW wheat fell as low as $10.55 3/4 and is poised for a second consecutive lower weekly close after ending last week at $11.06 1/2. May HRW is also heading for a second weekly decline.

Live cattle and feeder cattle futures are higher at midmorning.  

• Live cattle futures are modestly higher on renewed strength in the cash market, while feeders are gaining support from weaker corn prices.
• USDA-reported live steers averaged $139.96 through yesterday morning, up $1.66 from last week's average. Other sources reported moderate cash trade at $138 in the Southern Plains yesterday and signaled most feedlots in the northern market continued to pass on steady prices in hopes packers would raise bids.
• Choice beef cutout values fell $1.03 yesterday to $257.05 but movement was strong at 148 loads.
• June live cattle is on track for a second consecutive weekly gain after ending last week at $132.95. Initial resistance is seen at the 100-day moving average around $137.30 and this week’s high at $137.60.

Lean hog futures are lower after sinking to fresh lows for the week.

• April lean hog futures are heading for a weekly decline on followthrough pressure from yesterday’s weak close. Declines are being limited by the lead month’s discount to the CME lean hog index.
• The lean hog index is up 36 cents to $100.77, near a six-month high posted a week ago. The cash market is in a seasonally weak period, but tight animal supplies should provide longer-term price support.
• Pork cutout values rose 18 cents yesterday to $105.20, the highest since March 9. Movement totaled 293 loads.
• April lean hogs fell as low as $99.75 and are down from $102.725 at the end of last week.