Market Snapshot | July 1, 2022

Corn futures are mostly lower at midmorning, led by declines of 8 to 9 cents in new-crop contracts.

• December corn extended Thursday’s slide and reached the lowest levels in four months after USDA’s higher than expected acreage and quarterly stocks estimates.
• Improved rain chances in the Midwest also weighed on corn futures. Three rounds of organized rain expected through Thursday “will at least temporarily improve soil moisture and conditions for crops in much of the Midwest,” World Weather Inc. said today. “Notable improvements in soil moisture should occur in many areas from eastern Nebraska and eastern Kansas to southern Wisconsin, northern Indiana, and southwestern Illinois.
• USDA, in its Acreage Report Thursday, boosted estimated 2022 U.S. corn plantings to 89.921 million ac., up from 89.49 million ac. in a March forecast and above the average analyst projection of about 89.861 million ac.
• December corn futures fell as low as $6.04 1/4, the lowest intraday price since the same low was posted March 1. The most-active contract is heading for a sharp weekly loss after ending last week at $6.74.

Soy complex futures are broadly lower, with new-crop soybeans down around 53 cents, August soymeal down nearly $11 and August soyoil down nearly 200 points.

• The soy complex is under heavy fund liquidation pressure amid technical weakness and an improving rainfall outlook for the Midwest, sending November soybeans to a three-month low.
• Traders expect USDA to report a record 181.8 million bu. of soybeans were crushed in May, according to a Bloomberg survey. That would be the largest crush ever for the month and up 4.8% from last year. Corn-for-ethanol use is expected to total 449.1 million bu., which would be up 0.2% from May 2021.
• An Argentine trucker strike ended Thursday after some unions upset with diesel shortages and prices reached a deal to lift the one-week protest around the major port of Rosario, which is expected to help the flow of grains for export.
• China will put up for auction another 500,000 MT of state-owned soybean reserves on July 8. Beijing has been regularly selling reserve soybeans since March in an effort to boost domestic market supplies.
• USDA lowered estimated U.S. soybean plantings 2.12 million ac. from a March forecast to 88.325 million ac., sharply under trade expectations. But USDA plans to re-survey three states in the northern Midwest due to delayed seeding.
• Malaysian palm oil futures fell 4.2% on recession fears and a higher supply outlook.
• November soybeans overnight fell as low as $13.95 3/4, the contract’s lowest intraday price since $13.94 on April 1. The most-active contract is down from $14.24 1/4 at the end of last week.

Wheat futures are sharply lower, led by declines of 36 to 38 cents in HRW contracts.

• Wheat futures extended Thursday’s declines amid heavy fund selling following a USDA quarterly stocks figure that exceeded expectations. Reports of Ukraine resuming grain exports through the Black Sea are also pressuring wheat prices.
• U.S. all-wheat stocks on June 1 totaled 660 million bu., about 5 million bu. above the average pre-report estimate but still down 22% from year-ago.
• The European Commission cut its EU soft wheat production forecast by 5.4 MMT from last month to 125.0 MMT, citing lower yields in France and other countries. Production is now forecast to decline from 130.1 MMT last year.
• September SRW wheat fell as low as $8.46 1/4, the lowest intraday price since Feb. 25, and is on track for its third consecutive weekly decline after ending last week at $9.36 1/2.

Cattle futures are higher at midmorning, led by sharp gains of nearly $3 in nearby live cattle.

• August live cattle futures jumped to the highest level in over a week behind a cash market that’s reached the highest in seven years.
• USDA-reported live steers averaged $145.85 this week through Thursday morning, $1.30 above last week's average.
• Wholesale beef is under pressure. Choice beef cutout values fell 88 cents Thursday to $264.00, the lowest since May 26, on movement of 102 loads.
• Feeder cattle are higher behind continued weakness in corn prices.
• August live cattle rose as high as $135.65, the contract’s highest intraday price since $135.80 on June 23.

Hog futures are mostly firmer, led by summer contracts.

• Nearby lean hogs are firmer but still tracking toward a second consecutive weekly loss amid signs the cash market has peaked.
• The CME lean hog index is down 42 cents today to $110.84 (as of June 29), the second consecutive drop and what could be the start of a down cycle in the cash hog market as slaughter supplies build through the second half of the year.
• Pork cutout values fell $1.31 Thursday to $107.25 on light movement of 222 loads.
• China’s ag ministry said its sow herd fell more than 8% in May compared with a year ago, more than the almost 5% decline previously estimated. But total size of the breeding herd at 41.92 million head did not change, according to data on the ministry website.
• August lean hogs are trading inside the wide range posted Thursday, when the contract fell to a seven-week low at $100.25. The most-active contract is down from $106.775 at the end of last week.