Ahead of the Open | April 26, 2022
GRAIN CALLS
Corn: 7 to 9 cents higher.
Soybeans: 10 to 12 cents higher.
Wheat: HRW and SRW 24 to 30 cents higher, HRS 10 to 15 cents higher.
GENERAL COMMENTS: Corn futures rose overnight after USDA reported slower-than-expected U.S. planting progress, while wheat rose after crop condition ratings fell to a 34-year low. Soybean futures also rose. Malaysian palm oil futures jumped nearly 3% from a selloff yesterday as traders assessed Indonesia’s export ban on refined palm olein. Nearby U.S. crude oil futures are more than $1 higher. U.S. stock index futures indicate a lower open, while the U.S. dollar index is nearly 200 points after reaching a two-year high for the third day in a row.
USDA reported daily soybean sales of 132,000 MT for delivery to China during the 2022-23 marketing year and 133,000 MT for delivery to “unknown destinations,” with 78,000 MT is for delivery during 2021-22 and 55,000 MT for delivery during 2022-23. Today’s announcement came a day after USDA reported soybean sales to China totaling 534,000 MT for 2021-22 and 2022-23.
Frost and light freezes were reported this morning in U.S. wheat areas of the Central Plains and western portions of the Midwest SRW production region, though none of the cold likely was potent enough to induce any permanent harm to crops, World Weather Inc. said.
Statistics Canada reported Canadian farmers intend to plant 25 million acres to wheat this year, up from 23.4 million acres last year and above traders’ expectations for 24.2 million acres. Stats Can estimated canola seedings at 20.9 million acres, down from 22.5 million acres last year and below expectations for 22.1 million acres.
Around 80,000 MT of Ukrainian grain is currently in the Romanian Black Sea port of Constanta, with another 80,000 MT “approved and en route,” according to the port’s manager. Romania earlier this month said it plans to re-open a Soviet-era train track at its port of Galati on the Danube River, which would help speed up Ukrainian grain transports. It was unclear when the track would reopen.
Archer-Daniels-Midland Co. reported higher-than-expected quarterly net income of $1.05 billion, as the Ukraine crisis exacerbated an already tight supply of essential crops. “We expect reduced crop supplies - caused by the weak Canadian canola crop, the short South American crops and now the disruptions in the Black Sea region – to drive continued tightness in global grain markets for the next few years,” Chief Executive Officer Juan Luciano said in a statement.
The Biden administration is weighing swift action to ramp up global food assistance amid rising concerns that Russia’s invasion of Ukraine is stoking a hunger crisis in many poorer nations. The White House is considering attaching a global food aid request to the military aid package for Ukraine to move the relief quickly.
India is prepared to help the world with more supplies of wheat to tame food inflation if Word Trade Organization (WTO) rules allow, the country’s foreign minister said. He said India had already raised its exports of wheat to make up for supply disruptions from the Black Sea region and could do more if global trade rules allowed.
Crop Consultant Dr. Michael Cordonnier raised his Argentine soybean crop estimate by 1 MMT to 40 MMT, noting yields are rising as more of the later-maturing acres are harvested. Cordonnier left his Argentine corn crop estimate at 49 MMT. He also left his Brazilian soybean and corn crop estimates at 123 MMT and 112 MMT, respectively.
Turkey tendered to buy 210,000 MT of milling wheat from unspecified origins.
CORN: July corn reached $8.07 overnight while the December rose as high as $7.43 1/2. U.S. corn planting progress is at its slowest pace in nine years, raising concerns over possible reduced acreage or yields. USDA late yesterday reported 7% of the U.S. corn crop was planted as of April 24, up from 4% a week earlier but below expectations for about 9% and under the 15% five-year average for the date.
SOYBEANS: July soybeans reached $16.92 overnight while trading within yesterday’s range. Nearby soyoil also climbed as concerns over tight global vegetable oil supplies underpinned prices. The soybean crop was 3% planted as of April 24, up from 1% a week earlier but down from the 5% five-year average for the date.
WHEAT: July SRW wheat overnight reached $11.04 1/2, the highest intraday price since April 20, while July spring wheat posted a contract high at $11.99 3/4. Concern over drought-stressed conditions in the U.S. Plains continued to support winter wheat. USDA reported an unexpected drop in winter wheat condition ratings, with the amount rated “good” or “excellent” falling three percentage points to 27%, the lowest for this time of year since 1989.
When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop plunged 10.8 points to 260.7, led by a 6.2-point drop in the Kansas crop and a nearly 3-point decline in Oklahoma. The SRW rating inched 0.4 point higher to 350.6. The HRW crop stands 69.5 points below the five-year average for the date, while the SRW crop was 9.1 points below normal. Click here for more details.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures may see followthrough pressure after steep declines Monday weakened the market’s technical posture and cash prospects. Cash prices will likely soften following two weeks of gains, though active trade isn’t likely until late in the week. Last week, live steers averaged $143.02 last week, up $2 from the previous week. Choice beef cutout values fell $1.31 to $266.60 on light movement of 67 loads, suggesting that current prices are curbing demand.
June live cattle dropped $3.00 yesterday to $135.425, a two-week closing low. May feeder cattle fell $2.575 to $161.30.
HOGS: Lean hog futures could face carryover pressure from Monday’s selloff, which sent the June contract down the $4.75 daily trading limit to $114.025, the contract’s lowest settlement since March 9. The daily trading limit expands to $7.00 today. Demand concerns hang over the market with the dollar surging, China imposing Covid lockdowns and wholesale prices taking a sharp drop. Pork cutout values plunged $5.49 yesterday to $105.79, the lowest daily average since April 8. The drop was led by a decline of over $24 in bellies. Movement totaled about 294 loads. Strength in cash benchmarks may help futures find a bottom, with the CME lean hog index up another 83 cents today on support from seasonal strength.
