Market Snapshot | April 25, 2022

Corn futures are mostly lower at midmorning, posting slight losses in most contracts.

• New-crop December corn fell for the fourth session in the past five and hit a two-week low amid forecasts for better planting conditions in the Midwest. Weakness in soybeans and winter wheat weighed on nearby corn.
• The Midwest will see a mix of rain and sunshine during the next two weeks, with seasonal warming and increasing drying rates, World Weather Inc. said today. “Planting should advance between rain events,” the forecaster said.
• USDA’s next weekly crop condition update after today’s close likely will show farmers made little planting progress over the past week. The crop was 4% planted as of April 17, behind the 6% average for the previous five years.
• USDA reported 1.65 MMT (65.0 million bu.) of corn inspected for export during the week ended April 21, up from 1.175 MMT the previous week. Expectations ranged from 1.0 to 1.5 MMT.
• July corn futures overnight fell as low as $7.81 before finding support just above Friday’s low of $7.80 1/2. December corn dropped as low as $7.14 1/2, down from a contract high at $7.55 hit April 19.

Soy complex futures are moderately to sharply lower, led by nearby soyoil; soybeans are down 22 to 25 cents and soymeal is down around $5.

• Soybean futures extended overnight losses as the market followed soyoil and Malaysian palm oil lower following reports that a ban on palm oil exports from Indonesia is less extensive than previously thought.
• Indonesian government officials told palm oil companies that an export ban announced late last week would cover shipments of refined, bleached, deodorized RBD palm olein but not crude palm oil, Reuters reported.
• USDA reported daily soybean sales of 330,000 MT for delivery to China, 66,000 MT for delivery during the 2021-22 marketing year and 264,000 MT for delivery during the 2022-23 marketing year. Another 204,000 MT of soybean sales were reported during the reporting period to China for 2022-23. Today’s sale marked China’s first USDA-reported daily purchases since April 15, when the country bought a total of 389,000 MT (on April 19, USDA reported a sale of 123,650 MT to “unknown destinations”).
• USDA reported 602,178 MT (22.1 million bu.) of soybeans inspected for export during the week ended April 21, down from 1.004 MMT the previous week. Expectations ranged from 600,000 MT to 1.075 MMT.
• Argentine farmers are unlikely to take full advantage of record soyoil prices due to drought, a recent export tax hike and subsidies to keep domestic prices low. Drought has cut some of Argentina’s soybean production this year. The government recently increased its soyoil and meal tax from 31% to 33%.
• July soybeans dropped as low as $16.56 1/2, the contract’s lowest intraday price since $16.56 on April 14. The most-active contract gained 22 3/4 cents last week. New-crop November soybeans fell to a two-week low. July soyoil fell as low as 78.00 cents after hitting a contract high at 83.21 cents Friday.

Winter wheat futures are lower, led by declines of 15 to 17 cents in nearby SRW; spring wheat futures are slightly lower.

• Nearby SRW wheat fell for the fifth consecutive day and reached the lowest levels in over two weeks on continued profit-taking pressure and sagging U.S. exports.
• Rain in U.S. HRW wheat production areas during the weekend “was not enough to seriously change crop or field conditions, but there were a few pockets of improved topsoil moisture,” World Weather said.
• Warm air returning to the region this week “will quickly remove the beneficial moisture cutting short the time for crop improvement,” the forecaster said. The Plains region will continue to see less-than-normal rainfall for the next 10 days.
• USDA reported 287,997 MT (10.6 million bu.) of wheat inspected for export during the week ended April 21, down from 446,225 MT the previous week. Expectations ranged from 300,000 to 475,000 MT.
• China has stopped its weekly wheat auctions from state reserves, earlier than last year when stocks were higher.
• July SRW wheat fell as low as $10.55 3/4, the lowest intraday price since $10.22 1/4 April 8.

Live cattle and feeder cattle futures are sharply lower at midmorning.

• Live cattle futures gapped lower and tumbled to a two-week low after USDA’s Cattle on Feed Report indicated animal supplies won’t be as tight as once thought.
• The April 1 feedlot inventory was up 1.7% from last year and March placements fell just 0.4%, both well on the bearish side of expectations. Placements were expected to fall 7.8%. Also, USDA’s Cold Storage Report showed March beef inventories rose to a record 536.9 million lbs. for the month.
• Wholesale beef slipped last week, with Choice beef cutout values down $2.26 Friday to $267.91, down from $272.62 at the end of the previous week.
• Futures action suggests the cash market’s two-week streak of gains may soon end. Live steers averaged $143.00 through Friday morning, up nearly $2.00 from the previous week’s average.
• June live cattle’s steep lower open left a wide gap between Friday’s low at $138.35 and today’s high at $136.85. Technicals took a sharp bearish turn with June futures sinking under 40- and 50-day moving averages to hit $134.925, the lowest intraday price since $134.50 on April 12.

Hog futures are sharply lower, led by nearby contracts.

• Lean hog futures sank sharply as technical selling and weakness in the cattle market overruled continued strength in cash fundamentals.
• Today’s CME lean hog index is up 42 cents to $101.67, the highest since April 4. Pork cutout values ended last week at $111.28, up from $110.21 a week earlier. Movement was stronger at 336 loads.
• USDA’s Cold Storage Report showed pork stocks at 487.2 million lbs. at the end of March, up 7.3 million lbs. from February and contrary to the typical drawdown for the month. Over the previous five years, pork stocks declined an average of 18.6 million lbs. during March. Pork inventories were still 79.4 million lbs. (14.0%) under the five-year average, so the data shouldn’t be seen as too bearish.
• June lean hogs dropped below last week’s low at $116.55 and fell to $114.325, the contract’s lowest intraday price since $112.925 on April 11. Technicals have turned increasingly bearish with futures pushing under most short- and medium-term moving averages and bears possibly targeting the April low at $112.20.