Market Snapshot | March 25, 2022
Corn futures are narrowing mixed at midmorning, with nearby contracts slightly firmer.
- Corn futures are continuing sideways consolidation trade as the market shifts focus to USDA’s March 31 Prospective Plantings Report.
- The report is expected to U.S. corn plantings at 92 million acres, based on a Bloomberg survey of analysts. The acreage projection would be down 1.4 million acres from last year.
- Farmers in Mato Grosso, Goias, Sao Paulo, Minas Gerais and the Matopiba region of Brazil probably planted more safrinha corn than initially projected, and favorable weather likely would boost the country's yields, Safras & Mercado analyst Paulo Molinari said.
- Safras & Mercado next week may increase its projection of the safrinha corn crop to more than 83 MMT. The consultant pegs Brazil’s overall corn crop at a record 115.7 MMT and projects the country’s corn exports at 34.5 MMT, up 66% from 2020-21.
- May corn has traded both sides of unchanged and continues to pivot around $7.50, the middle of a range that’s held for three weeks. The lead contract is up from $7.41 3/4 at the end of last week.
Nearby soybeans are 3 to 6 cents higher and nearby soymeal is up nearly $3, while nearby soyoil is slightly firmer.
- Nearby soybeans rose for the fourth day in the past five as exports showed signs of perking up this week. A 7.0% weekly gain in Malaysian palm oil futures is contributing to a supportive backdrop.
- China returned to the U.S. market after a brief absence. USDA reported a daily sale of 132,000 MT of soybeans for delivery to China during the 2021-22 marketing year. Today’s announcement follows two daily soybean sales announcements earlier this week totaling 558,000 for delivery to “unknown destinations” for 2021-22.
- U.S. soybean plantings in 2022 are expected to increase 1.7 million acres to 88.9 million acres, based on the Bloomberg survey.
- Canada is crushing the smallest amount of the oilseed in more than four years, in another sign that vegetable oil prices may keep rising. In February, the processing of canola in Canada dropped 21% from a year ago to 629,153 MT, according to Statistics Canada.
- European oilseed crushers and vegoil refiners and bottlers are replacing sunflower oil with the rapeseed variety to make up for the loss of Ukrainian oil-crop exports, industry group FEDIOL said.
- May soybeans rebounded after falling as low as $16.84 3/4 overnight and the contract is on track for a solid weekly gain after closing at $16.68 last week. Critical resistance is seen at this week’s high of $17.36 1/2 and the contract high of $17.59 1/4 posted Feb. 24.
Winter wheat futures are mixed while spring wheat is 2 to 5 cents lower.
- Nearby SRW futures are poised to end a two-week losing streak as the market shifts focus to U.S. spring weather and seedings. Russia/Ukraine disruptions may keep futures underpinned but appear to be priced in for now.
- The amount of U.S. winter wheat considered in drought conditions decreased to 70% for the week ended March 22, according to the U.S. Drought Monitor noted on Thursday. USDA rated winter wheat drought as 21% “moderate,” 31% “severe,” 16% “extreme” and 2% “exceptional."
- The U.S. HRW belt received no precipitation over the past day but a weather disturbance is expected to bring rain and snow around the middle of next week, according to World Weather Inc. Southwestern areas are expected to receive the least amount of moisture and “will continue to have a strong need for greater precipitation,” the forecaster said.
- May SRW wheat fell as low as $10.64 3/4 before rebounding about 20 cents. The lead contract is up from $10.63 3/4 at the end of last week.
Live cattle futures are mixed at midmorning while feeder futures are lower.
- Nearby live cattle are slightly firmer as the market waits for USDA’s monthly Cattle on Feed Report after today’s close.
- The report is expected to show record March 1 inventories and a year-over-year increase of about 6.1% in February placements, based on a Reuters survey. Marketings are expected to rise about 4.0% from February 2021.
- Choice beef cutout values gained another 81 cents yesterday to $262.41, the highest in over a month. Movement totaled 129 loads.
- Live steers averaged $138.81 through yesterday morning, down 29 cents from last week's average.
- June live cattle rose as high as $137.70, up from $137.075 at the end of last week. The most-active contract faces resistance at the Jan. 5 high of $137.95 and the 40-day moving average around $138.25.
Lean hog futures are sharply higher after posting fresh contract highs.
- June lean hog futures surged to a contract high for the second day this week amid support from firming cash fundamentals.
- The CME lean hog index ended a two-day slide and rose 29 cents to $101.50, near a six-month high reached a week ago. Futures’ gains today widened the nearby April contract’s premium to the index to around $2.57, up over $1 compared with yesterday’s close.
- Pork carcass cutout values rose $1.62 yesterday to a three-week high of $108.01, led by a gain of over $11 in hams. Movement totaled 257 loads, the lowest daily figure so far this week.
- Traders are looking ahead to USDA’s Hogs & Pigs Report on March 30.
- The U.S. is shipping pork at a record clip to Mexico as hog diseases are shrinking the Mexican hog herd. Outbreaks of porcine epidemic diarrhea virus (PEDV) and porcine reproductive and respiratory syndrome (PRRS) have been killing pigs in Mexico.