Market Snapshot | May 18, 2022
Corn futures are sharply lower at midmorning, with most contracts down 17 to 19 cents.
- Corn futures are under pressure from a sharp reversal lower in the wheat market and prospects for a return of grain shipments out of Ukraine.
- U.N. chief Antonio Guterres is expected to disclose talks with Russia, Ukraine, Turkey, the U.S. and European Union aimed at restoring Ukraine grain shipments and reviving fertilizer exports from Russia and Belarus.
- The Midwest will see a mix of rain and sunshine during the next two weeks that will disrupt planting while keeping conditions favorable for newly planted crops, World Weather Inc. said. “Planting will advance between rounds of rain, but rain will fall frequently enough that dry periods in most areas longer than a couple days will be rare.”
- U.S. ethanol production averaged 991,000 barrels per day (bpd) during the week ended May 13, unchanged from the previous week but down 4% from the corresponding week last year. That’s the first weekly year-over-year decline in ethanol production since the week ended Sept. 3, 2021.
- Ethanol stocks declined 349,000 barrels to 23.791 million barrels, the smallest inventory since the week ended Jan. 14.
- July corn futures fell as low as $7.81, near initial support at the 40-day moving average of $7.74.
Soy complex futures are broadly lower, with soybeans down 16 to 23 cents and nearby soyoil down around 200 points; soymeal is down $2 to $3 in most contracts.
- Soybeans are under spillover pressure from selloffs in corn and wheat and weakness in crude oil.
- USDA reported soybean sales of 229,200 MT during the reporting period for delivery to “unknown destinations,” including 10,200 MT for 2021-22 and 219,000 MT for delivery during 2022-23.
- Soyoil futures are under heavy pressure amid pressure from crude oil. That’s overshadowing overnight strength in palm oil.
- July soybeans faded after rising overnight to $16.86 3/4, the contract’s highest intraday price since $16.88 3/4 on May 2. Initial support is seen in the $16.50 to $16.52 area, where 20-, 40- and 50-day moving averages converge.
Wheat futures are sharply lower, with nearby HRW, HRW and SRW contracts down 40 to 50-plus cents.
- Winter wheat futures are under corrective profit-taking pressure following sharp gains earlier this week and prospects for increased supplies from Ukraine.
- Scouts on the first day of the Wheat Quality Council HRW tour found an average yield of 39.5 bu. per acre in northern areas of Kansas, down from 59.2 bu. per acre in this area last year and the five-year average of 46.9 bu. per acre.
- In conjunction with the Wheat Quality Council HRW tour, the Nebraska Wheat Board forecast the state’s wheat crop at 36.9 million bu., the same as USDA’s initial estimate last week and down from 41.2 million bu. last year.
- Russia’s wheat crop may reach 85 MMT this year, the head of IKAR ag consultancy said, in what he called a “conservative” estimate. SovEcon raised its Russian wheat crop estimate to a record 88.6 MMT.
- July SRW wheat faded sharply after rising overnight to $12.80, 4 cents under the contract high posted Tuesday.
Live cattle and feeder cattle futures are moderately to sharply lower at midmorning.
- Live cattle futures are pressured by further weakness in the cash market.
- August feeder cattle fell to a contract low at $164.60 despite weakness in corn futures.
- Light cash trade at $136.00 to $137.00 was reported in the Southern Plains this morning, down about $1.00 from Tuesday’s activity. Early-week cash trends suggest the live steer average will slip for a second straight week.
- Choice cutout values rose 17 cents Tuesday to $260.48, the highest in two weeks. Movement was stronger at 118 loads.
- USDA’s Cattle on Feed Report Friday is expected to show a fifth consecutive monthly increase in U.S. feedlot inventories. The U.S. feedlot inventory as of May 1 was up 1.3% from a year earlier, based on a Reuters survey of analysts. April placements are expected to have declined 4.6%.
- June live cattle fell as low as $131.35, a low for the week. Technicals have eroded as prices trended lower for almost a month and pushed under most moving averages. Key support in June futures is seen at this month’s low of $131.025, posted May 9.
Hog futures are moderately to sharply lower.
- Hog futures have faded after three days of corrective gains. Since corrections tend to come in three-day waves, today’s close could be critical in determining whether the past three days were simply strong corrective buying or the start of a delayed seasonal rally.
- Despite today’s losses, summer-month hog futures are trading at premiums to the cash index, which is down another 17 cents to $99.90 today (as of May 16).
- Pork cutout values rose 56 cents Tuesday to $102.11, the highest in over a week, while movement totaled over 366 loads, the highest daily total in two months.
- China imported 140,000 MT of pork in April, according to official customs data, the same amount as March but down 67.6% from last year. Through the first four months of this year, China’s pork imports plunged 65.1% from the same period last year to 560,000 MT.
- June lean hog futures fell as low as $102.475 before finding support just under the 10-day moving average at $102.65. Over the previous three sessions, the lead contract rallied $7.675 from a four-month closing of $97.475posted May 12.