Market Snapshot | June 22, 2022

Corn futures are mostly lower at midmorning, with nearby July firmer and deferred contracts lower.

• December corn faded from brief initial gains and fell back near a three-week low posted overnight on strong crop ratings and an outlook for less-threatening Midwest weather.
• USDA late Tuesday reported 70% of the U.S. crop in “good” or “excellent” condition as of Sunday, down from 72% from a week earlier and meeting expectations. When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop fell 3.5 points to 376.2, though that was still 4.4 points above the five-year average.
• Rapid drying will continue in many areas outside of the northwestern Corn Belt through Saturday as temperatures remain warm to hot, World Weather Inc. said. “Most areas will see little to no rain of significance before a welcome period of milder temperatures occurs Sunday through next week.”
• Brazilian farmers are expected to harvest a bigger second corn crop this season than previously forecast, based on a recent crop tour conducted by Agroconsult. Brazilian farmers are now expected to reap 89.3 MMT of second corn, more than the 87.6 MMT forecast in May.
• December corn overnight fell as low as $6.90, the contract’s lowest intraday price since $6.88 1/2 on June 3. The new-crop contract plunged 27 1/4 cents to start the week.

Soy complex futures are lower, with new-crop soybeans down around 25 cents and nearby soyoil down around 190 points; nearby soymeal is slightly weaker.

• Soybean futures extended Tuesday’s declines and fell to the lowest levels in over five weeks on expectations lower Midwest temperatures next week will ease stress on crops.
• USDA’s “good” to “excellent” rating for soybeans fell to 68% as of Sunday from 70% a week earlier and about 1 percentage point lower than expected. Based on the weighted Pro Farmer CCI, the soybean crop dropped 4.9 points to 366.0, though that was still 5.5 points above average for the date.
• The soybean crop was 94% planted as of Sunday, up from 88% a week earlier and one percentage point ahead of the five-year average. North Dakota jumped to 92% planted from 75%.
• November soybeans overnight fell as low as $14.83, the contract’s lowest intraday price since $14.78 1/4 on May 13. July soybeans fell to $16.61, also near a five-week low.

Wheat futures are mixed, with HRW and SRW contracts up 11 to 16 cents and spring wheat narrowly mixed.

• Winter wheat futures sustained a corrective bounce from overnight trading. Reports of a Russian strike on the Ukrainian port city of Mykolaiv contributed to price strength.
• Efforts to create a shipping corridor through the Black Sea for safe passage of Ukrainian grain exports continue, with both Ukraine and Russia requesting assurances before agreeing to a deal, while Turkey and the United Nations attempt to negotiate, Reuters reported.
• Increasing harvest activity likely will limit price upside in winter wheat. USDA said the winter wheat harvest was 25% complete as of Sunday, up from 10% a week earlier and about two percentage points higher than expected.
• USDA reported the spring wheat crop in 59% “good” or “excellent” condition, up from 54% the previous week. The Pro Farmer CCI for the spring wheat crop improved 10.8 points to 364.21, which was 17.3 points above the five-year average.
• July SRW wheat overnight fell as low as $9.60, the contract’s lowest price since March 2, before rebounding amid corrective buying. July HRW wheat fell to $10.25 1/2, a 2 1/2-month low, before rebounding.

Live cattle and feeder cattle futures are lower at midmorning.

• Live cattle futures are lower as followthrough technical pressure from a weak close Tuesday overshadows a firm cash market tone will continue this week.
• Cash cattle traded rather actively around $138 in the Southern Plains on Tuesday, about steady with last week’s weighted average in the region. Based on initial activity, prices are likely to be steady to firmer compared with last week’s average of $143.67.
• Choice beef cutout values rose $1.06 Tuesday to $267.56 on strong movement of 143 loads.
• USDA’s monthly Cattle on Feed Report Friday is expected to show feedlot inventories as of June 1 up 1.4% from the same date a year earlier, based on a Reuters survey of analysts. Feedlot placements during May fell about 0.4% from a year earlier, based on the survey.
• Live steers averaged $143.67 last week, up from the previous week’s average of $140.14.
• August live cattle fell below the 50-day moving average near $135.40, partially filling a gap on the daily chart created last week.

Hog futures are lower, led by deferred contracts.

• Lean hog futures fell for the first session in the past five amid corrective selling following the past week’s rally. Firm cash fundamentals continue to support futures.
• The CME lean hog index is up $1.29 today (as of June 20) to $110.45, the highest level since August. July futures are about $1.50 above today’s cash quote, while the August contract holds a discount of about $1.46.
• Pork cutout values fell $1.01 Tuesday to $110.86, though movement was relatively strong at 335 loads. July lean hogs rose $1.725 Tuesday to $112.725, the contract’s highest close since April 28.
• China will buy another 40,000 MT of frozen pork for state reserves on June 24. Beijing continues to stockpile pork via weekly purchases to boost hog margins.
• July lean hogs rose as high as $112.875, the contract’s highest intraday price since $113.20 on June 3, before fading.