Market Snapshot | May 13, 2022

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Corn futures lower at midmorning after erasing overnight gains, led by a drop of about 10 cents in the July contract.

  • Corn futures ran into some pre-weekend profit-taking pressure after initially extending Thursday’s post-USDA gains overnight. July corn is on track for a second weekly decline.
  • Weather-delayed fieldwork and reduced yield prospects are limiting selling, with USDA’s next weekly update Monday likely to show U.S. corn seeding still behind schedule. Also, USDA, in its monthly Supply and Demand Report  lowered its 2022-23 U.S. corn yield projection to 177 bu. per acre, down 4 bu. from trendline forecast and unchanged from 2021-22.
  • The European Commission (EC) proposed helping Ukraine export its wheat and other grains by rail, road and river to get around Russia’s blockade of Black Sea ports, which is preventing those critical supplies from reaching parts of the world at risk of food insecurity.
  • Brazil’s National Supply Company, Conab, late Thursday revised its estimates for the country’s corn crop. Conab now projects the corn crop at 114.6 MMT, down 1 MMT from last month, instead of the previously reported 600,000-MT increase. Exports are now forecast at 37 MMT, down 1 MMT from what it previously released and steady with last month’s forecast.
  • July corn futures failed to top resistance around the 20-day moving average and fell as low as $7.78 1/2. The most-active contract ended last week at $7.84 3/4. December futures posted a contract high overnight at $7.58 1/2 before fading but is still up from $7.10 3/4 at the end of last week.

Soy complex futures are mostly higher, with old-crop soybeans up 18 to 23 cents and nearby soymeal up nearly $8.

  • July soybeans rose to a high for the week with support from gains in crude oil, a rebound in soymeal and fresh export business from China.
  • USDA reported a daily sale of 132,000 MT of soybeans for delivery to China during the 2021-22 marketing year. Today's report was USDA’s first soybean sales announcement to China since April 26.
  • Concerns over tight global grain supplies overshadowed bearish USDA numbers Thursday. USDA projected 2022-23 U.S. soybean production at an all-time high of 4.64 billion bu., about 27 million bu. above analysts’ expectations and 205 million bu. above 2021-22 production.
  • July soybeans rose to $16.39, the highest in a week, and is poised to end two straight weekly declines after ending last week at $16.22.

Wheat futures are mostly lower after erasing overnight climb.

  • Wheat futures faded after initially extending Thursday’s rally, which was driven by smaller-than- expected USDA stocks projections.
  • The wheat market has come under mild profit-taking pressure ahead of the weekend, but concerns over poor crop conditions and delayed plantings in the U.S. Plains continue to support prices.
  • Russia’s wheat export tax for May 20-24 will be $111.90 per metric ton, based on an indicative price of $359.90 per metric ton. The tax is down $2.40 from the previous week and this marked a second straight weekly decline.
  • France’s wheat crop ratings dropped to 82% “good” to “excellent” as of May 9, down seven points from the previous week, according to the country’s ag ministry. France’s wheat crop is struggling with dryness, with the ag ministry warning rain was urgently needed to avoid production losses.
  • July SRW wheat overnight reached at two-month high at $11.98 1/2 before fading to losses, while July HRW wheat posted a contract high for a second day in a row before also fading.
  • July spring wheat hit a contract high for a third consecutive day, reaching $13.35 3/4.

Live cattle futures are mixed and feeder cattle are firmer at midmorning.

Hog futures are sharply higher and led by a gain over nearly $3 in the July contract.

  • Hog futures are higher in a corrective bounce after steep losses the past three weeks sent the market into oversold conditions. Prices are still down sharply for the week, reflecting demand concerns and weak technicals.
  • The CME lean hog index fell 22 cents to $101.04 (as of May 11), down $1.46 over the previous four weeks. Summer-month hogs are trading at discounts to the cash index, which is rare for this time of year and illustrates heavily bearish sentiment is weighing on futures.
  • Pork cutout values fell 89 cents Thursday to $98.60, the lowest daily average since Feb. 8, though movement was stronger at 337 loads.
  • June lean hogs rose as high as $100.575 but are still heading for a third consecutive weekly decline after ending last week at $104.10.
  • Initial support in June comes in at Thursday’s low at $97.10, the contract’s lowest intraday price since $96.475 on Jan. 13. Further weakness may have bears targeting the January low at $95.30.
 

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