10:30 Market Snapshot | March 30, 2022

Note: Hopes of peace talks between Russia and Ukraine have faded, which is spurring a recovery in grain and soy markets this morning. Talks with Ukraine in Istanbul yielded “no breakthrough,” a Kremlin spokesman says. Russian forces bombarded Chernihiv in northern Ukraine on Wednesday, a day after promising to scale down operations. Kyiv and its Western allies dismissed a pullback near the capital as a ploy by Russia to regroup from heavy losses. The Pentagon says Russia is moving troops around Kyiv, not withdrawing them. Meanwhile, the U.S. Treasury department is preparing new sanctions against Russia’s military supply chain. The aim is to hit “Russia’s ability to build and maintain the tools of war that rely on these inputs.”

Corn futures are 10 to 17 cents higher at midmorning, with old-crop contracts leading gains.

• Corn futures have regained a good portion of what the market lost on Tuesday amid strong corrective buying.
• Based on the average pre-report estimate from a Reuters survey, corn acreage intentions in Thursday’s Prospective Plantings Report are expected to decline about 1.4 million acres from last year to 92.0 million acres.
• USDA’s Grain Stocks Report tomorrow is expected to show March 1 corn stocks at 7.877 billion bu., based on the average pre-report estimate, but the range of estimates is a wide 457 million bushels.  
• Weekly ethanol production declined 6,000 barrels per day for the week ended March 25 to 1.036 million bpd. Ethanol production remained 7.4% above the comparable week last year. Ethanol stocks rose 381,000 barrels to 26.529 million barrels, the third most ever and the highest level since the record of 27.689 million barrels the week ended April 17, 2020.
• May corn has rebounded as high as $7.48 3/4. A close above $7.26 3/4 would negate Tuesday’s downside breakout from the nearly four-week sideways range.

Soybeans are 22 to 27 cents higher, soymeal is $6 to $9 higher and soyoil is mostly 60 to 75 points higher.

• After a risk-off day on Tuesday, soybeans, soymeal and soyoil are all trading sharply higher this morning amid a corrective rebound as outside pressures have faded.
• USDA is expected to show soybean acreage intentions of 88.7 million acres, which would be up about 1.5 million acres from last year.
• March 1 soybean stocks are expected to total 1.902 billion bu., though the range of estimates is a wide 363 million bushels.
• USDA reported a daily sale of 128,000 MT of soybeans to Mexico for 2022-23.
• May soybeans have rebounded as high as $16.83 3/4 this morning. The contract remains in the recent sideways to higher trading range after threatening a downside breakout on Tuesday.

Wheat futures are being led by gains of 20-plus cents in nearby HRW contracts. SRW futures are mostly 12 to 17 cents higher. HRS contracts are 8 to 10 cents higher.

• Wheat futures are rebounding from Tuesday’s sharp losses. A sharp drop in the U.S. dollar index, which is threatening to drop below its three-plus week sideways range is adding support, though U.S. wheat remains uncompetitively priced on the global market.
• Thursday’s Prospective Plantings Report is expected to show all wheat acreage intentions at 47.8 million acres, including 34.4 million acres of winter wheat, 11.8 million acres of other spring wheat and 1.7 million acres of durum.
• March 1 wheat stocks are expected to total 1.045 billion bu., though the range of estimates is a wide 304 million bushels.
• May SRW wheat futures have reached as high as $10.40 1/2 this morning. A close above $10.31 3/4 would negate Tuesday’s bearish downside breakout from the bearish flag formation on the daily chart.

Feeder cattle are lower but off their earlier lows. Live cattle have turned mixed after trading lower early.

• Feeder cattle are being pressured by a strong rebound in the corn market after finding support from sharp losses in corn on Tuesday.
• Live cattle initially followed feeder cattle lower but have turned mixed in light trade as traders wait on direction from the cash market.  
• Packers have been slow to establish cash bids, though cash sources expect cattle to eventually trade steady to possibly higher.
• Choice boxed beef prices firmed 63 cents on Tuesday, while Select fell $1.48. Packers moved only 87 loads of product on the day, signaling they remain selective buyers.

Lean hog futures are trading widely mixed, with the April and May contracts lower and others higher.

• Hog futures opened under pressure, but buyer interest developed in most deferred contracts.
• April hogs are being pressured by the premium the lead contract holds to the cash market, despite a rising cash index.
• The CME lean hog index is up another 63 cents today to $103.56. April lean hog futures are trading around $1.75 above that level.
• USDA’s Hogs & Pigs Report this afternoon is expected to show the U.S. hog herd contracted 1.2% from year-ago as of March 1. Based on the average pre-report estimate, the March 1 hog herd is expected to total just over 73 million head, including a market hog inventory of 66.8 million head (down 1.3%) and breeding herd of 6.2 million head (up 0.1%).
• The pork cutout value dropped $3.47 on Tuesday, mostly due to an $11.53 decline in cash belly prices.