Market Snapshot | April 5, 2022

Corn futures are 7 to 9 cents higher at midmorning.

• Corn futures are higher amid the rally in winter wheat markets, which surged on unexpectedly low USDA crop ratings.
• Brazil’s safrinha crop outlook is “still good” despite recent dryness, World Weather Inc. said. Mato Grosso and northern Mato Grosso do Sul are expected to receive little to no rain over the next 10 days, but subsoil moisture should remain favorable and some timely rain will fall later this month.
• May corn reached $7.68, two cents below resistance at last week’s high of $7.70. A clost above last week’s high may have market bulls targeting the contract high of $7.82 3/4, posted March 4. Initial support is seen at last Friday’s low of $7.30 1/4.
• December corn posted a contract high for the fourth session in a row, reaching $7.11 1/4.

Soybean futures are up 15 to 23 cents, while nearby soymeal is up $7 to $9 and nearby soyoil is steady to up 20 points.

• Soy complex futures are firmer behind strength in wheat and concerns over disruptions to global vegetable oil markets from Russia’s war with Ukraine. Malaysian palm oil futures rallied overnight.
• A lack of buyer interest in crude oil futures today is limiting buying in soyoil.
• Concerns over restricted supplies from South America also supported soybeans. Leaders from Argentina’s major transportation union are urging a national strike April 11 to demand an increase in grain freight rates amid a shortage of fuel supplies and high prices.
• May soybeans rose as high as $16.35 1/4 after gaining 19 1/2 cents yesterday. Initial resistance is seen at the 40-day moving average at $16.42, followed by the 10-day moving average around $16.53. Key support is seen at a 2 1/2-month intraday low of $15.76 3/4 posted yesterday.

Wheat futures are higher, led by gains of 30-plus cents in most HRW and SRW contracts.

• Winter wheat futures gapped higher at the overnight open after USDA reported lower-than-expected crop ratings Monday afternoon. Futures have given back much of the overnight gains and are trading around mid-range.
• USDA’s first crop condition ratings of the spring indicated drought damage to the U.S. winter wheat crop was worse than previously thought. Late yesterday, USDA reported 30% of the U.S. winter wheat crop in “good” or “excellent” condition as of yesterday, about 10 percentage points under analysts’ expectations.
• When USDA’s initial crop condition ratings of the spring are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop plunged 51.9 points from last fall to 272.6, while the SRW crop dropped 19.1 points to 342.2. The HRW CCI rating at the beginning of April is 57.3 points below the five-year average and the lowest since 2011. The SRW CCI rating is 14.4 points below the five-year average to start spring.
• Ukraine's grain traders union UGA has asked the government to cancel wheat export curbs as domestic stocks are high and the shipments would not affect Ukrainian food security, the union said. In March, Ukraine introduced export licenses for wheat, corn and sunflower oil. Two weeks later, the government cancelled export restrictions on corn and sunoil.
• May SRW wheat jumped to $10.74 overnight, leaving a gap between yesterday’s high at $10.14 1/2 and today’s low at $10.20.

Cattle futures are lower at midmorning, led by sharp declines in feeders.

• Feeder cattle futures are under pressure from continued gains in the corn market and cash weakness. Feeder steers and heifers traded steady to $3.00 lower yesterday in Oklahoma City amid moderate to good demand.
• Live cattle futures extended yesterday’s declines, sinking to three-week lows on softening technicals and expectations for weaker cash trade.
• Some cash cattle traded at roughly steady $138 in the Southern Plains and $222 in the northern dressed market Monday, with sources uncertain whether those transactions reflected cleanup sales from last week or feedlots settling for steady prices out of concern the market will slip later in the week.
• June live cattle fell as low as $133.85, the contract’s lower intraday price since $132.825 on March 14.

Hog futures are mixed at midmorning after rebounding from earlier declines.

• Some lean hog futures are facing mild followthrough selling this morning.
• The CME lean hog index slipped another 22 cents today to $102.41, the third straight daily decline and a $1.25 drop over that span after the benchmark hit a seven-month high last week.
• April hog futures are trading around $3 below the lean hog index, which is limiting selling activity.
• Pork cutout values rose $2.75 yesterday to an average of $106.35. Movement was relatively strong at about 304 loads.
• June lean hogs fell as low as $115.00, the contract’s lowest intraday price since $114.725 on March 11.