Market Snapshot | May 10, 2022

Corn futures are modestly firmer and trading in narrow ranges at midmorning.

• Corn futures climbed after lower-than-expected USDA planting progress fueled concerns over reduced yield potential.
• USDA late Monday reported 22% of the U.S. corn crop was planted as of Sunday, up from 14% the previous week but under the 50% average for that date the previous five years. Progress fell short of analysts’ expectations for plantings at about 25%.
• Crop Consultant Dr. Michael Cordonnier cut his U.S. corn yield projection by 1.5 bu. to 177 bu. per acre given slow planting. He notes corn yield potential declines about 0.3% for each day planting is delayed in early May and that increases to about 1% per day at the end of the month. Cordonnier also cut his planted acreage estimate by 500,000 acres to 90.0 million acres.
• French farmers are expected to cut back on corn planting and devote more area to sunflower seeds in response to rising fertilizer costs, the country’s farm ministry said. The ministry forecasts farmers will plant 1.37 million hectares of corn for grain in 2022, down 6.1% from last year. Sunflower seed area was estimated at 758,000 hectares, up 8.5% from 2021.
• July corn is holding just above yesterday’s four-week low at $7.69. A break under yesterday’s low could trigger further fund liquidation and have bears targeting key support levels, such as the 20- and 50-day moving averages at $7.62 3/4 and $7.53 1/2, respectively.

Soy complex futures are mixed, with soybeans mostly 4 to 5 cents higher and nearby soyoil up more than 150 points; nearby soymeal is down a little more than $2.

• Soybean futures are higher after Monday’s losses spurred corrective buying. Concerns over slow planting progress supported new-crop futures.
• USDA reported 12% of the U.S. crop was planted as of Sunday, up from 8% the previous week but under the five-year average of 24%. Progress fell short of expectations for about 16%.
• Cordonnier cut his Brazil soybean estimate by 1.0 MT to 122.0 MMT, citing continued heavy rains in Rio Grande do Sul “where farmers are significantly behind in their soybean harvest.” He maintained his U.S. soybean acreage and yield projections at 91.0 million acres and 51.5 bu. per acre, respectively.
• Malaysia’s ag ministry proposed cutting the export tax on palm oil by as much as half to help fill a global edible oil shortage and grow market share of the world’s second-largest palm oil producer. Malaysia could temporarily cut the tax to 4% to 6% from the current 8%, with a decision possible as early as June.

Wheat futures are higher, led by gains of 9 to 10 cents in spring wheat.

• Wheat futures rose in a corrective bounce from sharp declines yesterday and lingering concerns over drought conditions in the U.S. Plains and delayed planting in the Northern Plains.
• USDA reported modest improvement in winter wheat crop conditions, with the “good” to “excellent” rating rising to 29% as of Sunday from 27% and the “poor” to “very poor” rating falling to 39% from 43%.
• 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 improved 5.4 points to 259.2, though that’s still 69.4 points below the five-year average for this date. The SRW crop slipped 4.7 points over the past week to 346.3, which is 13.0 points below the five-year average.
• July SRW wheat overnight dropped as low as $10.83 before finding support just above its 20-day moving average at $10.81 3/4 and rising to gains. The most-active contract dropped 15 3/4 cents Monday after earlier reaching a three-week high at $11.35.

Cattle futures are lower at midmorning but off initial lows.

• June live cattle futures bounced back from initial weakness but deferred futures are under pressure as demand concerns continue to hang over the market.
• Choice boxed beef prices rose $3.85 on Monday to $258.29, up from an eight-week low. Packers moved a strong 131 loads, suggesting retailers are close to wrapping up purchases for beef features for Memorial Day weekend, traditionally the beginning of the summer grilling season.
• Traders are waiting to see whether last week’s modest cash strength extends to this week. Live steers averaged $143.42 last week, up 8 cents from the previous week.
• Feeder cattle are being pressured by strength in corn, though buying in that market is limited.

Hog futures are mixed, with nearby contracts firmer and deferred weaker.

• Nearby hogs are up in a modest corrective bounce from yesterday’s drop to 3 1/2-month lows, with a slight rebound in cash fundamentals also providing support.
• The CME lean hog index rose 18 cents today (as of May 6) to $101.09, the first gain in nine days. Further strength in the index could signal the start of a seasonal upturn.
• Pork cutout values fell 31 cents Monday to $104.39 on movement of 294 loads. June lean hogs fell $2.80 Monday to $101.30.
• June lean hog futures are trading within Monday’s range. A break under Monday’s low at $101.05 could have bears targeting psychological support around $100.00 and the January low at $95.30.