Market Snapshot | May 9, 2022

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Corn futures are moderately to sharply lower at midmorning, led by declines of about 16 cents in new-crop contracts.

  • Nearby corn futures fell near four-week lows, sustained overnight weakness on expectations warmer, drier weather in the Midwest this week will boost planting progress.
  • Once rain ended in the eastern Corn Belt Friday, most areas were warmer and dry Saturday and Sunday and saw improving conditions for fieldwork with planting likely in some of the drier areas, World Weather Inc. said today. “Overall, warmer and drier weather during the next two weeks should allow for good planting progress,” the forecaster said, with the far northwestern Corn Belt continuing to see the poorest conditions. “Once the topsoil firms up this week, the mix of rain and sunshine expected through May 23 will allow fieldwork to advance between rounds of rain.”
  • A week ago, USDA reported 14% of the U.S. corn crop was planted as of May 1, up from 7% a week earlier but below the 33% average for the previous five years.
  • USDA reported 1.393 MMT (54.8 million bu.) of corn inspected for export during the week ended May 5, down from 1.696 MMT the previous week. Expectations ranged from 1.0 to 1.7 MMT.
  • Ukraine has sown about 7 million hectares of spring crops so far this year, 25% to 30% less than in the corresponding period in 2021, according to the country’s ag minister. “The sowing campaign is going on actively despite the difficulties associated primarily with logistics,” the minister said.
  • July corn overnight fell as low as $7.71 1/4, the contract’s lowest intraday price $7.63 1/2 on April 13. The most active contract dropped 28 3/4 cents last week to halt four straight weeks of gains.

Soy complex futures are broadly lower, with soybeans mostly 30-plus cents lower, July soymeal down nearly $10 and July soyoil down around 175 points.

  • Nearby soybean futures extended overnight declines and dropped to five-week lows as eroding technicals drove continued fund liquidation. Improved planting conditions weighed on new-crop soybeans.
  • Farmers are expected to catch up on some delayed seeding this week as weather turns warmer. Last week, USDA reported the U.S. soybean crop at 8% planted as of May 1, below the five-year average of 13%.
  • USDA reported 503,414 MT (18.5 million bu.) of soybeans inspected for export during the week ended May 5, down from 604,711 MT the previous week. Expectations ranged from 400,000 to 885,000 MT.
  • China imported 8.1 MMT of soybeans last month, up 27.2% from March and 8.5% more than April 2021, as delayed shipments from Brazil arrived at Chinese ports. Through the first four months of 2022, China imported 28.4 MMT of soybeans, down 0.8% from the same period last year.
  • Large speculators reduced bullish bets in the soybean market in early May to the lowest level since late January. The manage money net long in soybean futures and options fell 20,224 contracts during the week ended May 3 to 153,253 contracts, the lowest since the week ended Jan. 25, according to data from the Commodity Futures Trading Commission.
  • July soybeans fell as low as $15.84, the contract’s lowest price since $15.60 1/2 on April 4, after falling 62 3/4 cents last week. November soybeans dropped to $14.44, also a five-week low.

Wheat futures are mixed, with SRW contracts lower after fading from overnight gains and HRW and spring wheat firmer.

  • Winter wheat futures climbed to three-week highs overnight on concerns over drought conditions in the U.S. Plains, while spring wheat rose to contract highs on planting delays in the Northern Plains.
  • Erratic thunderstorm activity over the coming week in will produce “locally meaningful” rain that will benefit parts of the Plains, World Weather said. However, unusual heat “will lead to significant evaporation rates… net drying will still occur in most areas due to the heat.”
  • USDA’s weekly crop ratings after today’s close will be watched for further deterioration. A week ago, USDA reported 27% of the winter wheat crop in “good” or “excellent” condition as of May 1, unchanged from the previous week's 34-year low. USDA rated 43% of the U.S. winter wheat crop in “very poor” or “poor” condition, up from 39% the week prior.
  • USDA reported 236,847 MT (8.7 million bu.) of wheat inspected for export during the week ended May 5, down from 392,443 MT the previous week. Expectations ranged from 100,000 to 425,000 MT.
  • July SRW wheat overnight reached $11.35, the contract’s highest intraday price since $11.43 1/2 on April 19, before fading. The contract faces initial resistance around $11.43 to 11.43 1/2, marking back-to-back intraday highs posted April 18-19.
  • July spring wheat hit at contract high at $12.34 3/4.

Cattle futures are mostly lower at midmorning but have recovered some of the initial losses.

  • Live cattle futures extended last week’s slide and are near three-month lows on concerns over beef demand at a time when feedlot inventories are poised to increase.
  • Choice cutout values fell 74 cents Friday to $254.44, down $6.34 for the week and an eight-week low. Movement was light at 80 loads. While the cash market remains firm, packers continue to cut prices in an effort to stir retailer demand and move product with the summer grilling season looming.
  • USDA-reported live steers averaged $143.43 last week through Friday morning, up 9 cents from the previous week's average.
  • June live cattle fell as low as $131.025, the contract’s lowest intraday price since $130.975 on March 4. A break under March low support would trigger further technical selling, with bears likely targeting the $130.00 level and the October low at $128.35.

Hog futures are sharply lower, with June and July contracts dropping near five-month lows.

  • Lean hog futures extend last week’s declines as cash fundamentals continued to slip and concerns lingered over pork demand.
  • Today’s CME lean hog index is down 5 cents to $100.91, the eighth consecutive decline and a three-week low. While the market should strengthen seasonally as slaughter supplies decline, bulls face headwinds until the cash index shows solid strength.
  • Pork cutout values fell $1.57 Friday to $104.70 as bellies dropped over $15, but the average was still up 12 cents for the week. Movement totaled 299 loads.
  • China imported 592,000 MT of meat in April, down nearly 36% from last year. China’s preliminary trade data doesn’t break down meat imports by category, but the sharp reduction was due to significantly lower pork arrivals. Through the first four months of this year, imports at nearly 2.3 MMT also fell 36% from the same period last year.
  • June lean hog futures fell as low as $101.05, the contract’s lowest intraday price since $100.275 on Jan. 18. Technicals turned significantly bearish with the sellover over the past two weeks, and further weakness may have bears targeting psychological support around $100.00 and the January low at $95.30.
 

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