Market Snapshot | May 27, 2022
Corn futures are 12 to 14 cents higher at midmorning, led by the July contract.
- Corn futures extended overnight gains behind strength in wheat as traders monitored Midwest weather and squared positions ahead of the three-day holiday weekend. Funds actively sold corn futures earlier this week, with sales totaling a net of about 38,500 contracts, according to Reuters.
- The Midwest weather outlook for the next two weeks “remains favorable for crops in the ground, as a mix of rain and sunshine will keep soil conditions favorable across the region,” 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.”
- Traders expect USDA’s next weekly crop progress update on Tuesday due to the Memorial Day holiday, likely will show corn planting nearing completion. The crop was 72% planted as of May 22.
- July corn futures rose as high as $7.79 1/2 and are near last week’s close at $7.78 3/4. Initial resistance comes in around the 10- and 40-day moving averages, both at about $7.82 1/2. Support is seen at this week’s low of $7.65.
Soy complex futures are mixed, with nearby soybeans up about 17 cents and soymeal up more than $5, while soyoil is lower.
- Nearby soybeans futures erased overnight weakness and are climbing near five-week highs, supported by tight supplies and optimism over demand.
- Planting delays remain a concern, especially in northern parts of the Midwest. The crop was 50% planted as of May 22, below the 55% five-year average.
- Russia will not remove its ban on exports of sunflower seeds at the end of August, Interfax news agency reported. Ukraine and Russia are the world’s largest sunflower oil producers.
- July soybeans reached $17.44 1/4, the highest intraday price since $17.41 on Feb. 24, and are on track for a sharp weekly advance after ending last week at $17.05 1/4.
Wheat futures erased overnight losses and turned higher, led by gains of 24 to 26 cents in SRW and spring wheat.
- Winter wheat futures rose for the first day in four and spring wheat futures also gained amid concerns over delayed planting in the Northern Plains.
- Wheat futures fell earlier this week following reports Russia may allow food shipments out of Ukraine, though there has been little apparent progress and the market appears skeptical any agreement happens.
- Russian wheat exports could jump to 50 MMT in 2022-23, up sharply from around 37 MMT this year, according to the country’s ag minister. Russia is expected to harvest 130 MMT of grain, including 87 MMT of wheat.
- Hot, dry conditions continue to erode crop conditions in France. The country’s ag ministry rates 69% of the soft wheat crop as good/excellent, down four percentage points from the previous week and 20 points over the past three weeks.
- Russia’s wheat export tax for June 1-7 will be $121.20 per MT, based on an indicative price of $373.20 per MT. The tax is up $10.70 from the previous week and the first increase in a month.
- South Korea purchased 124,700 MT of milling wheat, including 41,620 MT from the U.S., 50,000 MT from Australia and 33,080 MT from Canada.
- July SRW wheat reached $11.70 1/4 and is now slightly higher for the week after ending last week at $11.68 3/4.
Live cattle futures are firmer and trading in narrow ranges at midmorning while feeders are weaker.
- Live cattle futures are up slightly in consolidation trade ahead of the long holiday weekend. Continued weakness in cash prices likely will limit the upside.
- USDA-reported live steers averaged $138.46 for the week through Thursday morning, down from last week’s average of $140.25. Packers slowed cattle purchases this week after aggressively buying the past two months.
- Choice beef cutout values rose $1.04 Thursday to $263.97 on strong movement of 134 loads. August live cattle rose 7.5 cents Thursday to $132.60, up from $131.55 at the end of last week.
- August live cattle rose as high as $132.95 before fading but is still up from $131.55 at the end of last week. Initial resistance at $135.55 is backed by the 40-day moving average near $136.10. Support is seen at the March 4 low of $132.625 and at $131.00.
Hog futures are mostly firmer, with only the nearby June contract down.
- Lean hog futures extended a recent rally, rising for the fourth day in five and posting a four-week high behind continued strength in cash fundamentals.
- The CME lean hog index is up another 53 cents to $104.40 (as of May 25), the seventh straight daily gain and the highest since late August. Summer-month futures hold premiums of about $7 to the index, suggesting traders feel the cash market will continue to strengthen seasonally into summer.
- Strength in wholesale pork may is also supporting futures. Pork cutout values gained $1.06 Thursday to $108.13, near a four-week high posted earlier this week. Movement remained relatively light at 233.5 loads.
- July lean hogs reached $112.85, the contract’s highest intraday price since April 29, and is on track to post a sharp gain for the week after ending last week at $109.00.