Market Snapshot | June 29, 2022

Corn futures are mixed at midmorning, with the July contract higher and new-crop contracts lower.

• July corn gained and deferred contracts slipped amid bull spreading and narrow-range trading ahead of USDA’s Acreage and quarterly Grain Stocks reports tomorrow. The near-term Midwest weather outlook appears to be unthreatening, though dryness could become a concern.
• No excessive heat is expected in the heart of the Midwest for the next couple of weeks, but many areas will need rain, World Weather Inc. said. Low soil moisture remains in parts of the U.S. Midwest and timely rain “will be extremely important over the next couple of weeks,” the forecaster said today. “Most forecast models are offering some timely rain, but its distribution may not be ideally suited leaving some areas drier biased while others get a little boost in moisture.”
• In its Acreage update, USDA is expected to raise its forecast for U.S. corn plantings by about 370,000 acres, to 89.86 million, based on a Reuters survey of analysts.
• December corn overnight rose as high as $6.62 1/2 after gaining 6 1/4 cents Tuesday following lower-than-expected USDA crop ratings.

Soy complex futures are broadly higher, with deferred soybean contracts up 10 to 11 cents, August soymeal up about $5 and August soyoil up over 100 points.

• New-crop soybeans extended this week’s rally and rose for the fourth consecutive session ahead of a USDA report that’s expected to show that farmers planted fewer acres than projected this spring.
• USDA is expected lower its estimate for 2022 U.S. soybean plantings to about 90.45 million ac., down 509,000 acres from a March forecast, based on the Reuters survey.
• Malaysian palm oil futures fell 1.7% on expectations for rising production and weaker demand. Front-month crude oil futures rose over $1.60 to the highest levels in over a week.
• November soybeans rose as high as $14.76 3/4 after jumping 29 3/4 cents Tuesday.

Wheat futures are mixed after erasing overnight gains, with SRW and spring wheat lower and HRW higher.

• SRW wheat faded from overnight strength as accelerating U.S. harvest pressure outweighed signs the recent price slump stirred improved demand.
• Analysts on average expect USDA to lower its forecast for U.S. all wheat seedings to 47.017 million ac. from 47.351 million ac. in its March projection.
• September SRW wheat rose as high as $9.56 cents overnight before trimming gains and dropping to $9.29 3/4; the most-active contract dropped to a four-month low of $9.13 1/2 on Monday.

Live cattle and feeder cattle futures are mostly lower at midmorning.

• Live cattle futures are under mild pressure and trading in narrow ranged as weakness in the wholesale beef market raises concern over slower demand.
• Choice beef cutout values fell $1.54 Tuesday to $267.14, though movement was strong at 154 loads. Retailers continue to be selective buyers. After July 4, there are no major “beef holidays” until Labor Day, meaning retailers likely will be selective through the rest of summer.
• USDA-reported live steers last week averaged $144.55, up 88 cents from the previous week, though there remained a wide discrepancy between trade in the Southern Plains and the northern region.
• August live cattle are trading within Monday’s range, with support at Monday’s low at $132.35 and resistance at the 40-day moving average of $134.25.

Hog futures are mixed, with summer contracts weaker and deferred contracts higher.

• Nearby lean hogs are under followthrough pressure from a weak close Tuesday and concern over pork demand as traders wait for USDA’s Hogs & Pigs numbers.
• Cash fundamentals remain firm, with the CME lean hog index up 27 cents today after posting a 10-month high at $111.64 yesterday. But summer-month lean hog futures expanded discounts to the cash index, signaling traders anticipate cash will soon start to soften as market-ready supplies build during the second half of the year.
• Pork cutout values fell $3.56 Tuesday to a three-week low at $105.47, despite a nearly-$20 gain in bellies. Movement was strong at 322 loads. August lean hogs fell $1.05 to $103.825, closing near the session low.
• USDA’s Hogs & Pigs Report this afternoon is expected to show the U.S. hog herd continued to contract, with the average estimate for the June 1 inventory down 0.7% from year-ago. The breeding herd is expected to be down 1.1% and the market hog inventory down 0.7%.