Market Snapshot | March 22, 2022

Corn futures are mixed at midmorning, with nearby contracts fading from overnight gains.

• Nearby corn futures retreated from initial gains as the wheat market cut sharp overnight advances. Expectations favorable conditions in South America will benefit Brazil’s safrihna crop provided price pressure.
• “Most of Brazil and Paraguay will see a good mix of rain and sunshine through the next two weeks that will be supportive of crop development with breaks between rounds of rain adequate to allow fieldwork to advance,” World Weather Inc. said today.
• Traders continue to closely follow the Russia/Ukraine war. Ukrainian crops from last year’s harvest are locked down in warehouses behind Russian battle lines, the Wall Street Journal reported, and farmers face the loss of wheat that is already in the ground and corn crops later this year because they can’t get needed materials.
• The U.S. could be planning to donate around 400,000 MT of emergency food aid to Ukraine, sources report.
• May corn retreated from an overnight climb to $7.61 but is still trading within yesterday’s range. A push above initial resistance at yesterday’s high at $7.65 may have bulls targeting last week’s high at $7.67 1/2 and the contract high at $7.82 3/4. Initial support comes in at last week’s low of $7.26 3/4.

Soy complex futures are mixed, with nearby soybeans up 2 to 4 cents and soyoil also higher while nearby soymeal is more than $5 lower.

• Nearby soybeans faded from an overnight advance near two-week highs but are sustaining modest gains, though further declines in corn and wheat may pressure the soy complex.
• Fresh export business added support. USDA reported a daily soybean sale of 240,000 MT for delivery to “unknown destinations” during the 2021-22 marketing year. Before today, USDA hadn’t reported a daily soybean sale from China or unknown destinations since March 11.
• Farmers in Paraguay have completed their soybean harvest, which the Soybean, Oilseed, and Cereal Produces Association of Paraguay deemed the worst in the country’s history. As a result, South American Consultant Dr. Michael Cordonnier lowered high Paraguay soybean crop estimate by 1 MMT to 4 MMT.
• Cordonnier left his production estimates unchanged for Brazil and Argentina. In Brazil, Cordonnier estimated production at 123 MT for soybeans. In Argentina, he estimated production at 39 MMT for soybeans.
• May soybeans overnight reached $17.20 3/4, the contract’s highest intraday price since $17.34 on March 9. Renewed bullish momentum may prompt bulls to target the March 9 high as well as the contract high of $17.59 1/4, reached Feb. 24.

Wheat futures are mixed, with nearby HRW, SRW and HRS lower and deferred contracts slightly higher.

• Nearby HRW and SRW futures erased overnight gains and tumbled to mild losses on profit-taking following a run to two-week highs and moisture relief in the U.S. Plains.
• Rains ranging from 0.25 inch to more than 2 inches fell over most of Oklahoma, the eastern two-thirds of Kansas and the Texas Panhandle over the past day, World Weather said.
• “Most areas will receive enough precipitation to increase soil moisture and promote greening and general winter crop improvement,” World Weather said yesterday.
• The war continues to disrupt Ukrainian agriculture and grain shipments out of the Black Sea. Russia’s naval blockade has cut off shipping exports, but Ukraine is shipping some goods through Western borders by train. Russia is also struggling to get its crops through the Black Sea. By one estimate, the country’s grain shipments are down 60% from normal levels.
• May SRW wheat overnight reached $11.69 1/4, the contract’s highest intraday price since $12.21 1/4 on March 10, before fading. Initial support is seen at last week’s low of $10.31 3/4.

Cattle futures are mostly higher at midmorning and trading in narrow ranges.

• Live cattle futures rebounded from yesterday’s late slide on expectations for further strength in the cash market.
• Feeder cattle futures are being supported by weakness in old-crop corn.
• Cash cattle trade averaged $139.10 last week, up 80 cents from the previous week. USDA’s Cattle on Feed Report will be released Friday, meaning the bulk of this week’s cash trade probably will be pushed later in the week.
• Firmer wholesale beef prices are also supporting futures. Choice cutout values rose 34 cents yesterday to $258.50, the highest daily average since Feb. 24. Select values jumped $1.85 to $252.50. Movement totaled 90 loads.
• June live cattle futures face initial resistance at the 50- and 40-day moving averages around $138.00 and $138.25, respectively. Support comes in around the 20-day moving average at $136.00.

Lean hog futures are lower in narrow-range trade.

• Lean hog futures are under a corrective setback after sharp gains yesterday, though firm cash fundamentals are limiting selling interest.
• The CME lean hog index is up 44 cents today (as of March 18) to $101.80, the third straight day of gains and the highest price since late August.
• Pork cutout values fell $3.34 yesterday to $101.61, the lowest daily average since Feb. 10, with declines led by hams and bellies. Movement totaled 306 loads.
• June lean hogs are trading within yesterday’s low and high at $116.325 and $120.825, respectively.