Market Snapshot | May 23, 2022

Corn futures are slightly firmer at midmorning.

• Corn futures are moderately firmer with support from a rebound in wheat and a sharp drop in the U.S. dollar index to a four-week low. Gains are being limited by weakness in soybeans.  
• USDA will likely report a further strong increase in corn plantings in its weekly Crop Progress update after today’s close. As of May 15, 49% of the U.S. corn crop was planted, up from 22% a week earlier but still well behind the 67% average for the past five years.
• The two-week outlook for the Midwest “remains favorable for crops in the ground, as a mix of rain and sunshine will keep soil conditions favorable while some of the drier areas see increases in soil moisture,” World Weather Inc. said today. “Rain will fall frequently enough that planting will be interrupted regularly, but there will be breaks between rounds of rain that allow fieldwork to advance.”
• Weekly export inspections surpassed expectations. USDA reported 1.699 MMT (66.9 million bu.) of corn inspected for export during the week ended May 19, up from 1.06 MMT the previous week. Expectations ranged from 600,000 MT to 1.5 MMT.
• July corn futures ran into resistance around the 10-day moving average at $7.87 1/2, with further resistance at the 20-day moving average around $7.93.

Soy complex futures are mixed with nearby soybeans down around 18 cents after retreating from overnight gains; nearby soymeal is down around $8 and soyoil is mixed.

• Nearby soybeans erased an initial climb to four-week highs as profit-taking pressure developed during daytime trading.
• USDA reported a soybean sale of 130,000 MT for delivery to Egypt during the 2021-22 marketing year.
• Also today, USDA reported 575,781 MT (21.2 million bu.) of soybeans inspected for export during the week ended May 19, down from 802,575 MMT the previous week. Expectations ranged from 400,000 to 900,000 MT.
• Indonesia allowed the resumption of palm oil exports today after a three-week ban, but shipments were unlikely to restart until details emerge on how much of the edible oil must be held back for domestic use.
• July soybeans overnight reached $17.20, the contract’s highest intraday price since $17.34 on April 22, before fading to losses. Bulls likely will target $17.34, the April high, and the contract high at $17.41.

Wheat futures are higher but trading in narrow ranges, led by gains of 10 to 15 cents in HRW contracts.

• Wheat futures rose in a corrective recovery from sharp decline during the second half of last week. Tight global supplies and poor crop conditions in the Plains continue to support prices.
• Rain is expected for U.S. HRW production areas early this week, World Weather said. “The moisture will be great for crops in Kansas, Colorado and Nebraska, but a little too late to change production in the southern Plains, including Oklahoma and Texas.
• USDA reported 309,502 MT (11.4 million bu.) of wheat inspected for export during the week ended May 19, down from 348,937 MT the previous week. Expectations ranged from 150,000 to 500,000 MT.
• Russian wheat export prices rose last week following higher wheat prices in Paris. Prices for wheat with 12.5% protein content from Black Sea ports were at $395-405 per MT free on board (FOB) at the end of last week, up $10 from a week earlier, the SovEcon consultancy said. IKAR, another consultancy, said the price rose by $20 to $410 per MT, but there were no deals signed.
• The managed money net long surged 11,039 SRW futures and options contracts during the week ended May 17 to 26,586 contracts, the largest since the week ended May 9, 2021, according to weekly Commodity Futures Trading Commission data. Wheat futures dropped sharply during the last half of last week, so funds may have shed many of those long positions.
• July SRW wheat is trading within Friday’s range after ending last week at $11.68 3/4, down 8 3/4 cents for the week. July HRW and spring wheat are also trading within Friday’s range.

Live cattle are mostly lower at midmorning, while feeders are mostly firmer.

• Live cattle are under pressure after Friday’s Cattle on Feed Report was negative compared to expectations, especially April placements. USDA estimated feedlot placements during April at 1.809 million head, down 0.9% from the same month in 2021 but well-above expectations for a drop closer to 4.6% and the second straight month placements surpassed expectations.
• The May 1 feedlot inventory was 11.967 million head, up a higher than expected 2.0%. April marketings fell 2.2% from year-ago, slightly under the average trade estimate.
• Wholesale beef will be watched closely for a gauge of retailer demand with buying for Memorial Day weekend grilling wrapped up. Choice beef cutout values ended last week at $262.17, up from $258.95 at the end of the previous week. Friday’s movement was light at 90 loads.
• USDA-reported live steers averaged $140.26 last week through Friday morning, down from last week’s average of $142.44.
• August live cattle fell as low as $131.00, the contract’s lowest intraday price since Nov. 1. The most-active contract fell 80 cents last week and remains in a month-long downtrend. August feeders dropped to a contract low at $162.80 before recovering.

Hog futures are higher, led by June and July contracts.

• Lean hog futures extended last week’s rally, reaching three-week highs on followthrough buying fueled by firming cash benchmarks and beliefs the market has started a delayed seasonal rally.
• The CME lean hog index is up 80 cents today to $101.17 (as of May 19), the third straight daily gain and near a two-week high. Summer futures’ premium to the index have climbed near $9.
• Pork cutout values rose $3.65 Friday to $107.11, up nearly $6 from the end of last week and the highest daily average since April 22, though movement was light at about 216 loads.
• USDA releases its month Cold Storage Report after today’s close. The data will detail frozen meat stocks at the end of April. The five-year average is a 16.4-million-lb. increase in pork stocks during the month.
• July lean hogs rose as high as $110.575. The most-active contract rallied $7.80 last week.