Market Snapshot | April 7, 2022

Corn futures are narrowly mixed, with nearby contracts slightly lower but off overnight lows.

• Old-crop corn futures fell a second day as the market extended a pullback ahead of USDA’s Supply & Demand Report Friday.
• USDA reported net U.S. corn sales for the week ended March 31 totaled 782,400 MT for 2021-22, up 23% from the previous week but down 44% from the average for the previous four weeks. For 2022-23, net sales totaled 145,200 MT. Sales were expected to range from 475,000 MT to 1 MMT for 2021-22 and 100,000 to 400,000 MT for 2022-23.
• USDA is expected to cut its production outlook for Argentina’s corn crop and boost its forecast for Brazil. Argentina’s corn crop is expected to be around 52 MMT, down from 53 MMT in a March estimate, based on a Reuters survey. Brazil’s crop is expected to be raised to 115.09 MMT from 114 MMT last month.
• May corn futures fell as low as $7.48 1/2 before rebounding at midsession. Barring any big surprises from USDA or a sharp move in wheat, May corn appears poised to extend a sideways consolidation around $7.50.

Soy complex futures are mostly higher, with nearby soybeans up around 20 cents and nearby soyoil up around 100 points; nearby soymeal is mostly firmer.

• Nearby soybeans climbed to a high for the week after Brazil-based consultancy Conab trimmed its forecast for the country’s soybean crop below USDA’s March projection.
• Conab lowered its Brazilian soybean crop estimate to 122.4 MMT, down from 122.8 MMT last month. By comparison, USDA last month cut its projection for Brazil’s crop by 7 MMT to 127 MMT. Conab also lowered its Brazil soybean export forecast to 77 MMT from 80.2 MMT.
• USDA will likely make further cuts to its South American soybean estimates Friday. Based on the Reuters survey, USDA is expected to lower its Brazil forecast to 125.14 MMT. Argentina’s crop is expected to drop to 42.83 MMT from 43.5 MMT.
• Net weekly U.S. soybean sales for 2021-22 totaled 800,700 MT, down 39% from the previous week and down 38% from the prior four-week average. Top buyers included China (435,700 MT, including 66,000 MT switched from “unknown destinations,” decreases of 2,300 MT, and 67,000 MT of late reportings). Net sales for 2022-23 totaled 298,500 MT. Sales were expected to range from 500,000 MT to 1.15 MMT for 2021-22 and 100,000 to 400,000 MT for 2022-23.
• May soybeans reached $16.44, toping yesterday’s high by one cent and the highest intraday price since $16.80 on March 31. The 40- and 20-day moving averages at $16.45 1/2 and $16.58 1/2, respectively, stand as near-term resistance.

Winter wheat futures are 2 to 8 cents lower, while spring wheat is 1 to 3 cents lower.

• Winter wheat futures fell a second day as the market extended a corrective setback, with additional pressure stemming from expectations for moisture relief in the U.S. Plains HRW belt.
• Shower and thunderstorm activity is expected to increase in parts of the primary HRW growing areas in the week ahead as a strong trough of low pressure moves into the central U.S., World Weather Inc. said today. However, the Texas and Oklahoma Panhandles, western Oklahoma and southwestern Kansas “will likely miss out from getting much moisture and the need for more rain will continue,” World Weather reported.
• Net weekly wheat sales totaled 156,300 MT for 2021-22, up 65% from the previous week but down 11% from the prior four-week average. For 2022-23, net weekly sales totaled 223,000 MT. Sales were expected to range from 50,000 to 500,000 MT for 2021-22 and 50,000 to 250,000 MT for 2022-23.
• Japan purchased 137,516 MT of milling wheat, including 59,999 MT from the U.S., 49,107 from Canada and 28,410 MT from Australia. The Philippines bought 55,000 MT of feed wheat – likely from India. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
• May SRW wheat is trading within yesterday’s range after falling as low as $10.23 3/4, a tick above yesterday’s low. The lead contract still has a 5 1/2-cent gap on the daily bar chart created earlier this week, a level that may be targeted by market bears.

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

• Live cattle futures climbed a second day as recent strength in wholesale beef signaled improving retail demand.
• Feeder cattle are gaining support from weakness in nearby corn futures, which are lower for a second straight day.
• Choice cutout values fell 49 cents yesterday to $271.04, down from a near three-month high. But movement was strong at 141 loads, as retailers boosted purchases at cheaper prices. 
• USDA-reported live steers averaged $138.70 through yesterday morning, down from last week’s average of $139.32.
• Net weekly U.S. beef sales totaled 14,000 MT for 2022, down 39% from the previous week and down 43% from the average for the previous four weeks.
• June live cattle reached $134.975, up from a three-week intraday low at $132.475 yesterday. Initial resistance is seen at the 10- and 20-day moving averages, both around $136.00.

Hog futures are slightly firmer in most contracts and trading near session highs.

• Lean hog futures rebounded from initial weakness near midmorning, supported by export strength and corrective buying.
• The CME lean hog index is down another 58 cents to $101.08, a drop of $2.58 over the past five days. But the benchmark is still over $2.00 above nearby April futures.
• Pork cutout values rose 77 cents yesterday to $104.37 on movement of 286.6 loads.
• Net weekly pork sales totaled 41,200 MT for 2022, up 49% from the previous week and up 44% from the prior four-week average. Mexico was the lead buyer at 13,200 MT, followed closely by China at 13,000 MT. Through February, U.S. pork shipments to China were down 71.1% from the first two months last year.
• June lean hogs are trading within yesterday’s range after dropping as low as $113.15 earlier this morning. Key support is seen at Tuesday’s low of $112.20, which was the contract’s lowest intraday price since $111.525 on March 8.