Market Snapshot | May 16, 2022
Corn futures are firmly higher at midmorning, led by gains of about 20 cents in the July contract.
- Nearby corn futures jumped to two-week highs on spillover from a steep rally in wheat, which soared after India’s export ban exacerbated concerns over tight global supplies. Reduced yield prospects due to delayed U.S. corn planting continued to lift new-crop futures.
- USDA’s weekly update after today’s close likely will show U.S. corn plantings remain behind schedule despite warmer, drier conditions in the Midwest last week.
- Last week, USDA reported 22% of the U.S. corn crop was planted as of May 8, up from 14% the previous week but under the 50% average for that date the previous five years.
- USDA reported 1.037 MMT (40.8 million bu.) of corn inspected for export during the week ended May 12, down from 1.477 MMT the previous week. Expectations ranged from 750,000 MT to 1.75 MMT.
- July corn futures reached $8.06 3/4, the contract’s highest intraday price since $8.09 on May 3. The lead contract fell 3 1/2 cents last week. December corn hit $7.66 1/4, a contract high for the second straight session.
Soy complex futures are mixed, with soybeans about 8 to 10 cents higher and soymeal up $4 to $5, while soyoil is lower.
- Nearby soybeans rose for a fifth straight day and hit a two-week high as strengthening technicals and export optimism combined with spillover from wheat.
- Concerns over planting delays are supporting new-crop futures. USDA last week reported the U.S. soybean crop at 8% planted as of May 8, below the five-year average of 13%. About 3% of the crop had emerged, 1 percentage point behind the five-year average.
- Traders expect the National Oilseed Processors Association (NOPA) to report soybean crush totaled 172.4 million bu. in April, according to a Reuters survey. While that would be down from 181.8 million bu. crushed in March, it would be a 7.5% increase from last year and the highest April crush on record. Soyoil stocks as of April 30 are estimated at a five-month low of 1.839 billion pounds.
- USDA reported 784,187 MT (28.8 million bu.) of soybeans inspected for export during the week ended May 12, up from 504,441 MT the previous week. Expectations ranged from 250,000 to 800,000 MT.
- Large speculators in early May slashed bullish bets in the soybean market to the lowest level since late January. The managed money net long in soybean futures and options fell 22,592 contracts during the week ended May 10 to 130,661 contracts, the lowest since Jan. 25, data from the Commodity Futures Trading Commission showed.
- July soybeans overnight reached $16.68, a two-week high, after gaining 24 1/2 cents last week. November soybeans gapped higher and reached $15.19 1/4, the highest since April 29.
Wheat futures are sharply higher, led by HRW and SRW contracts
- Nearby HRW futures rallied to 14-year highs and SRW futures reached two-month highs following reports India banned most wheat exports to manage domestic food security and prices. The government said it would still allow exports backed by already issued letters of credit and to countries that request supplies “to meet their food security needs.”
- The annual Wheat Quality Council HRW tour runs Tuesday through Thursday, with field reports from Kansas and surrounding areas. The tour will be of particular interest this year after USDA estimated the HRW crop at just 590 million bu. last week, which would be the smallest since 1963-64, including a Kansas crop of 364 million bushels.
- Traders await USDA’s weekly crop condition updates after today’s close. Last week, USDA reported modest improvement in winter wheat conditions, with the “good” to “excellent” rating rising to 29% as of May 8 from 27% and the “poor” to “very poor” rating falling to 39% from 43%.
- USDA reported 348,048 MT (12.8 million bu.) of wheat inspected for export during the week ended May 12, up from 262,919 MT the previous week. Expectations ranged from 100,000 400,000 MT.
- July HRW wheat overnight hit $13.52, the highest on the continuation chart since a record $13.84 3/4 in February 2008. July SRW reached a two-month high at $12.47 1/2. July spring wheat hit a contract high for a fourth consecutive day, reaching $13.85.
Live cattle futures are firmer at midmorning while feeders are weaker
- Live cattle futures are up on corrective buying following recent losses. Futures’ upside likely will be limited by weaker cash prices and concerns high retail prices are curbing beef demand.
- Feeder cattle are pressured by the strength in corn.
- Live steers last week averaged $142.41 through Friday morning, down about $1 from the previous week's average. Further cash weakness is expected amid higher marketings, but traders already have sizable discounts to the cash market built into summer-month live cattle futures.
- Choice cutout values rose $1.75 Friday to $258.95, up from 254.44 a week ago. But movement slowed to 92 loads.
- June live cattle reached $133.20 before running into resistance just above that price around the 10-day moving average. Initial support is seen at Friday’s low of $131.275.
Hog futures are sharply higher, led by a near-$4 gain in the July contract.
- Hog futures gapped higher at today’s open and extended Friday’s corrective bounce amid ideas the market has established a near-term bottom, though extended gains likely will require upside leadership from the cash market.
- The CME lean hog index fell 55 cents to $100.49 (as of May 12), the lowest since April 18 and over $1 below summer-month hog futures.
- Pork cutout values fell 89 cents Friday to $98.60, down from $104.70 at the end of last week. Movement was stronger for a second straight day at 337 loads.
- June lean hog futures rose as high as $104.45, the contract’s highest intraday price since $106.725 on May 6. Today’s strong open left a gap between Friday’s high at $100.825 and today’s low at $101.40.