Market Snapshot | May 25, 2022

Corn futures are 5 to 7 cents lower at midmorning but have recovered part of their initial decline.

• Corn futures sank near a seven-week low as the market tracked a slump in wheat following reports Russia was ready to provide humanitarian corridors for food shipments from Ukraine. A sharp jump in corn planting the past two weeks is also weighing on new-crop corn.
• Russia is ready to provide a humanitarian corridor for vessels carrying food to leave Ukraine in return for the lifting of some sanctions, Interfax news agency reported, citing Russian Deputy Foreign Minister Andrei Rudenko.
• U.S. ethanol production averaged 1.014 million barrels per day (bpd) during the week ended May 20, up 23,000 bpd from the previous week and up 0.3% from the corresponding week last year. Ethanol stocks declined 79,000 barrels to 23.712 million barrels, the smallest inventory since the week ended Jan. 14.
• China’s customs authority finalized an agreement to allow imports of Brazilian corn, the Ministry of Commerce said Tuesday, lining up an alternative to U.S. corn to replace imports from Ukraine. Similar agreements covering imports of soy protein and soymeal from Brazil are expected soon.
• July corn futures fell as low as $7.55, the contract’s lowest intraday price since $7.45 1/2 on April 8, while December futures fell to a two-week low at $7.08 1/4.

Soy complex futures are broadly lower, led by declines of around 12 cents in nearby soybeans and more than $4 in nearby soymeal; nearby soyoil is down around 80 points.

• Soybeans futures fell to lows for the week on spillover from weakness in corn and wheat, along with declines in Malaysian palm oil amid concerns over decreased demand from China.
• China’s soyoil consumption is expected to plunge as Covid lockdowns shutter restaurants, curbing soybean demand. Demand for all edible oils in 2021-22 is forecast to drop 8.5% from a year ago to 39 MMT, according to state-run National Grain & Oils Information Center.
• India’s palm oil imports could drop by nearly a fifth as cheaper soyoil takes more market share following Indonesia’s curbs on palm oil exports and New Delhi allowing duty-free imports of soyoil, dealers said. The country’s palm oil imports this year are expected to fall 19% to 6.7 MMT, the lowest since 2010-11.
• July soybeans fell as low as $16.65 1/2, the lowest intraday price since $16.60 3/4 on May 19, while November futures fell as low as $14.95 1/4. July remains above initial support, including the 20-, 40- and 50-day moving averages converging between $16.52 and $16.55.
• July soyoil fell a third straight day, dropping to 78.63 cents, just above a three-week low of 78.58 cents posted May 19.

Wheat futures are lower but up from earlier lows, with nearby contracts down around 20 cents.

• Winter wheat futures fell for a fifth session in the past six and hit two-week lows amid prospects Russia may allow food shipments out of Ukraine. Recent rains in winter wheat crop areas also pressured prices.
• Ukrainian farmers made it through much of the spring planting season, but some are concerned over sourcing enough diesel for the impending winter crop harvest, Reuters reported.
• India has no immediate plans to lift a ban on wheat exports but will continue with deals done directly with other governments, a commerce official said. The world’s second biggest wheat producer banned private overseas sales of the grain on May 14 after a heat wave curtailed output.
• July SRW wheat overnight dropped under the 40-day moving average at $11.39 1/4 and fell as low as $11.14 1/2, the contract’s lowest intraday price since $11.02 3/4 on May 12. Further weakness may have bears targeting the 50-day moving average around $10.96 1/2.

Cattle futures are mixed at midmorning after fading from initial gains.

• Nearby live cattle are little changed after generating limited followthrough buying interest in the wake of Tuesday’s strong close. Signs of weaker cash are limiting buyer interest.
• Feeder cattle also faded after firming initially behind weakness in the corn market.
• Choice cutout values fell 63 cents Tuesday to $263.65 but movement was strong at 165 loads. Wholesale beef trade signals retailers are being selective buyers, which is likely to continue into summer unless Memorial Day beef clearance is strong.
• Early-week cash trade indicated prices will continue to weaken this week. Live steers last week averaged $140.25, down $2.19 from the previous week’s average.
• August live cattle rose as high as $133.575, the highest intraday price since $134.40 on May 17. Initial resistance comes in around the 20-day moving average at $134.25, with support at Monday’s low at $131.00, a 6 1/2-month low.

Hog futures are solidly firmer but down slightly from earlier highs.

• Lean hog futures rose for the second day in three behind continued strength in cash fundamentals.
• The CME lean hog index is up another 95 cents today to $103.03 (as of May 23), the fifth consecutive daily gain and the highest reading since March 30.
• Pork cutout values extended a recent upturn, rising $1.19 Tuesday to $108.24, the highest daily average since April 22. July lean hogs fell $1.80 at $109.05.
• July lean hogs are trading within Tuesday’s high and low of $110.875 and $107.625, respectively. Initial resistance is seen at this week’s high of $111.125, followed by the 40-day moving average at $113.20. Initial support at yesterday’s low is backed by the 20-day moving average around $106.65.