Market Snapshot | April 20, 2022

Corn futures are mixed at midmorning, with old-crop firmer and new-crop lower.

• New-crop futures are under mild profit-taking pressure. Traders are also bull spreading the market after recently unwinding those spreads.
• Frequent precipitation across the Midwest through April 26, along with cool temperatures, “will keep fieldwork to a minimum in most areas,” World Weather Inc. said today.
• U.S. ethanol production averaged 947,000 barrels per day (bpd) during the week ended April 15, down 48,000 bpd from the previous week and just 0.6% above the corresponding week last year. Ethanol stocks fell 461,000 barrels to 24.342 million barrels, the lowest since the week ended Jan. 14, 2022.
• July corn extended yesterday’s losses, falling as low as $7.92 before rebounding near $8.00. A continuation of yesterday’s weak close, which followed a contract high, may stir ideas the market is establishing a near-term top.

Soy complex futures are mixed, with nearby soybeans up 7 to 13 cents and nearby soymeal up more than $3, while soyoil is mixed.

• Nearby soybeans are trading near four-week highs behind strength in the soymeal and crude oil markets.
• China’s soybean production is expected to increase nearly 26% this year amid major efforts to boost domestic output. Land planted to soybeans is forecast to rise 16.7%, according to the country’s ag ministry, and production is expected to jump 4.2 MMT to 20.6 MMT.
• Palm oil demand is expected to jump in coming months, driven by a widening discount to rival vegetable oils, Reuters reported. Higher demand could further boost palm oil prices that have already soared 38% so far in 2022 as the war in Ukraine has disrupted supplies of sunflower oil.
• July soybeans overnight hit $17.08 1/2, the contract’s highest intraday price since $17.13 on March 23. A push above the March high may have bulls aiming for the contract high at $17.41, posted Feb. 24.

Wheat futures are sharply lower, led by declines of over 20 cents in SRW and HRW contracts.

• Winter wheat futures tumbled to the lowest levels in over a week on followthrough technical pressure from a weak close yesterday.
• Supply disruptions from the Russia/Ukraine war and poor crop conditions in the HRW belt are being ignored today, though previous wheat downturns have been stemmed by renewed buying interest.
• Traders are also ignoring a sharp downturn in the U.S. dollar index, as U.S. wheat is not competitively priced on the global market.
• July SRW wheat pushed under chart support levels including the 10-day moving average and fell as low as $10.75, the lowest intraday price since April 11. Support is seen at the 20-day moving average of $10.87 1/4.

Cattle futures are moderately to sharply higher at midmorning.

• Live cattle extended yesterday’s gains and reached three-week highs on signs the cash market will continue strengthening.
• Some light cash trade in the $140 to $141 range was reported in the Southern Plains on Tuesday, up $1 to $2 from that region’s prices last week. That pushed asking prices on remaining supplies in that region up to $142.
• Traders await Friday’s USDA Cattle on Feed Report, which is expected to show a 7.8% year-over-year drop in March feedlot placements.
• Wholesale beef prices continued to soften, with Choice beef cutout values fell $1.15 yesterday to $269.93, the lowest daily average since April 4. Movement totaled 102 loads.
• June live cattle rose to $138.05, the contract’s highest intraday price since $138.475 on March 30.

Hog futures are sharply lower, led by nearby contracts.

• Lean hog futures extended yesterday’s late slide after the wholesale pork took a sharp turn lower, suggesting a pullback in demand.
• Pork cutout values fell $2.37 yesterday to $107.12, led by an $11-plus drop in bellies, as packers continued to encounter retailer resistance to prices above $110. Movement totaled about 296 loads.
• The CME lean hog index is up 17 cents to $100.50, the fifth straight daily gain. June futures are still trading nearly $21 above the index.
• China’s pork production is forecast to rise 2.9% to 54.5 MMT this year as the country’s hog sector continues to expand after being sharply reduced by African swine fever. But the rise in production has oversupplied the market, contributing to negative hog production margins for hog farmers.
• June lean hogs broke under the 20-day moving average around $119.65 and fell as low as $118.825. Initial support is seen at the 40-day moving average around $118.05.