Market Snapshot | April 8, 2022

Corn futures are higher at midmorning, led by gains of around 11 cents in the May contract.

• Corn futures climbed ahead of USDA’s monthly Supply & Demand update, which may reflect disruptions from the Russia/Ukraine war.
• USDA is expected to cut its production outlook for Argentina’s corn crop and boost its forecast for Brazil, based on a Reuters survey. Argentina’s corn crop is expected to be lowered about 1 MMT to 52 MMT, while Brazil’s crop is expected to be raised about 1 MMT to 115.09 MMT.
• U.S. ending corn stocks are expected to be lowered to around 1.415 billion bu. from 1.440 billion bu. in March.
• Global food prices as measured by the UN Food and Agriculture Organization (FAO) surged 12.6% in March to an all-time high behind record levels for vegoils, cereal grains and meat.
• May corn futures reached $7.69 3/4, a new high for the week and up from $7.35 at the end of last week. Bulls are targeting the late-March highs around $7.70 and the contract high at $7.82 3/4.
• December corn hit $7.14 1/4, a contract high for the third day this week.

Soy complex futures are solidly higher, with nearby soybeans up around 30 cents, nearby soymeal up around $8 and nearby soyoil up around 90 points.

• Nearby soybeans climbed to a high for the week ahead of expected USDA cuts to South American crop estimates. Gains in crude oil and Malaysian palm oil are contributing to soy complex strength.
• Based on the Reuters survey, USDA is expected to lower its Brazil soybean crop forecast to 125.14 MMT. Argentina’s crop is expected to drop to 42.83 MMT from 43.5 MMT last month. USDA is also expected to cut its estimate for 2021-22 ending U.S. soybean stocks about 23 million bu. to 262 million bushels.
• China will sell 500,000 MT of imported soybeans from its state reserves on April 15, the National Grain Trade Center said on its website. The sale, following an auction of the same amount from reserves this week, is aimed at alleviating tight domestic supplies.
• May soybeans pushed above resistance at the 20-day moving average to reach $16.81, the contract’s highest intraday price since March 30 and up from $15.82 3/4 at the end of last week.

Wheat futures are higher, led by gains of more than 30 cents in nearby SRW contracts.

• Winter wheat futures are on track for sharp gains this week amid ongoing concerns over disruptions from the Russia/Ukraine war and drought in the U.S. Plains.
• Little to no rain is expected the next seven days in the southwestern U.S. Plains, World Weather Inc. said today. HRW crop prospects “remain poor due to ongoing drought,” the forecaster said. “Significant production cuts are still expected unless the region receives significant rainfall in coming weeks.”
• USDA’s Supply & Demand Report is expected to show few changes for wheat. Analysts expect a projected U.S. ending wheat stocks for 2021-22 to be raised about 3 million bu. from last month to 656 million bushels.
• FAO’s global wheat production forecast for 2022 was lowered slightly, largely as a result of the conflict in Ukraine, but it still points to an increase of 1.1% from 2021 to 784 MMT.
• Russia’s wheat export tax for April 13-19 will be $101.40 per MT, based on an indicative price of $344.90 per MT, up $5.30 from the previous week and the fourth consecutive weekly gain.
• An estimated 92% of French soft wheat crops were in good or excellent condition in the week ended April 4, unchanged from the previous week and above a year-earlier score of 87%, farm office FranceAgriMer said.
• May SRW wheat rose as high as $10.53 3/4, up sharply from $9.84 1/2 at the end of last week. Initial resistance is seen at the 20-day moving average around $10.62 3/4 and further at this week’s high of $10.74. May spring wheat hit its highest level in over two weeks.

Live cattle futures are higher at midmorning after recovering from initial declines, while feeders are mostly higher.

• Live cattle continue to see support from recent strength in wholesale beef prices, though futures are still down for the week amid bearishness tied to expanding beef supplies.
• Choice cutout values gained 36 cents yesterday to $271.40, near a 2 1/2-month high posted earlier in the week, but movement was lighter than recent days at 94 loads.
• USDA-reported live steers averaged $138.72 this week through yesterday morning, down 60 cents from last week's average.
• June live cattle futures reached $135.15 this morning, but are down from $135.85 at the end of last week. Key support is seen at a three-week intraday low of $132.475 two days ago. Initial resistance is seen at the 10- and 20-day moving averages at $135.70 and $136.00, respectfully.

Hog futures are mixed at midmorning.

• Nearby lean hog futures remain under pressure and are heading for a sharp weekly decline due to slumping cash fundamentals.
• The CME lean hog index is down 40 cents to $100.68, a drop of $2.98 over the past six days. The index is still around $1.60 above nearby April hogs, but the cash market needs to show signs of a bottom to generate buying interest in futures.
• Pork cutout values fell $1.26 yesterday to $103.11, near a three-week low and led by a drop of nearly $13 in bellies. Movement totaled 252 loads.
• China’s state planner will buy another 40,000 MT of frozen pork for state reserve – its fourth round of stockpiling this year. The move is an effort to support domestic prices, which have fallen sharply.
• June lean hogs rose as high as $115.275 but are still down from $120.45 at the end of last week. Key support is seen at Tuesday’s low of $112.20.