Market Snapshot | June 23, 2022

Corn futures are sharply lower at midmorning, with new-crop contracts down around 40 cents.

• December corn extended Wednesday’s losses and dropped near a three-month low on an outlook for less-threatening Midwest weather and heavy fund liquidation.
• Midwest crops will benefit from cooler temperatures expected next week, but rain will be limited in most areas and much of the Midwest will dry down overall during the next two weeks, World Weather Inc. said. “The drying expected will leave crops (especially pollinating corn) vulnerable to quick increases in stress and declines in yield potentials if hot and dry weather returns in July.”
• Energy Information Administration (EIA) data for the week of June 20 is delayed due to “systems issues.” That includes weekly ethanol production data.
• Technicals have turned increasingly bearish in corn futures. December corn fell as low as $6.55, the new-crop contract’s lowest intraday price since $6.53 1/4 on March 31. July corn fell to $7.44 1/4, the lowest in over two weeks.

Soy complex futures are sharply lower, with soybeans down nearly 60 cents, soymeal down more than $10 and soyoil down more than 200 points.

• Soybeans joined a broad commodity market selloff and sank to 2 1/2-month lows on slumping technicals and expectations for improved weather conditions. Weakness in crude oil also weighed on the soy complex.
• Outside of the northwestern Corn Belt, near-term Midwest weather is not expected to be totally dry, with two rounds of rain forecast for Friday into Sunday and June 30-July 2 that “should buy crops more time before stress due to a lack of soil moisture becomes serious,” World Weather said.
• China’s soymeal inventories have tripled in the last three months as large volumes of soybeans arrived in the country, where demand for the animal feed is weak, Reuters reported. The high stocks, combined with a drop in soybean prices, pushed China’s soymeal futures down nearly 6% today.
• November soybeans fell as low as $14.15, the new-crop contract’s lowest intraday price since $14.04 3/4 on April 6. July soybeans dropped to $15.91 1/4, a six-week low.

Wheat futures are sharply lower, led by declines of 24 to 27 cents in HRW and SRW contracts.

• Winter wheat futures extended this week’s selloff and tumbled near four-month lows as chart breakdowns fuel fund liquidation and harvest pressure increases. Winter wheat harvest in the Plains is running ahead schedule with the bulk of the crop still in the field.
• Japan purchased 168,330 MT of wheat in its weekly tender, including 59,080 MT U.S., 63,820 MT Canadian and 45,430 MT Australiana. Saudi Arabia tendered to buy 480,000 MT of wheat.
• July SRW wheat overnight fell as low as $9.47, the contract’s lowest intraday price since $9.15 on March 1. July HRW wheat fell as low as $10.07 3/4, the lowest since March 29. Wheat futures will remain under pressure from technical weakness and accelerating harvest pressure.

Live cattle are lower at midmorning, while feeder cattle are higher.

• Live cattle futures are under followthrough technical pressure from a weak close Wednesday and signs of softening in the cash market.
• Feeder futures are higher behind slumping corn prices.
• Initial cash trade in the Southern Plains this week was reported around $138.00, indicating that the overall market this week will be well under last week’s average of $143.67.
• Wholesale beef movement has been strong this week, reflecting what’s likely the last push of retailer demand for July 4 features. Barring an unexpected surge in demand through the heart of summer, beef purchases are likely to slow.
• Choice beef cutout values fell 99 cents Wednesday to $266.57, though movement was strong at 157 loads.
• USDA’s Cold Storage Report at 2 p.m. CT will detail frozen meat stocks at the end of May. The five-year average is a 34.5-million-lb. decline in beef stocks during the month.
• August live cattle fell under the 20- and 40-day moving averages and as low as $134.075, the lowest intraday price in a week.

Hog futures are lower, led by a drop of more than $2 in the August contract.

• Lean hog futures fell a second consecutive day on continued corrective selling and profit-taking following the recent rally. Cash fundamentals remain price-supportive.
• The CME lean hog index rose 29 cents to a 10-month high at $110.74, up more than $10 since mid-May. July futures have erased a premium to the index and currently hold a discount of about 50 cents.
• Pork cutout values rose 29 cents Wednesday to $111.15, though movement was slower at about 259 loads. Packer margins have been negative for most of the past two months, which could limit cash market upside as slaughter supplies build during the second half of the year.
• July lean hogs fell as low as $109.45, the lowest intraday price in a week and filling a gap created with a strong open June 17. Initial support is seen at the 20-day moving average around $109.40.