Market Snapshot | July 5, 2022

Corn futures are sharply lower at midmorning, led by declines of around 28 cents in new-crop contracts.

• December corn gapped lower at today’s open and extended last week’s steep declines, dropping under $6.00 for the first time since late February after welcome rains reached much of the Midwest over the weekend.
• Rains of at least one inch to well over two inches fell over much of the Midwest yesterday, bringing relief to dry soils as the corn crop nears pollination. U.S. weather “is turning more favorable for summer crops with rain already reported in the northwestern Corn Belt during the weekend,” World Weather Inc. said.
• Traders will watch for any improvement in USDA’s next crop condition updates after today’s close. USDA reported 67% of the U.S. corn crop in either “good” or “excellent” condition as of June 26, down from 70% a week earlier and up from 64% on the same date in 2021.
• USDA reported 676,824 MT (26.7 million bu.) of corn inspected for export during the week ended June 30, down sharply from 1.247 MMT the previous week. Expectations ranged from 900,000 MT to 1.2 MMT.
• Brazilian farmers continue to report variable safrinha corn yields due to irregular rainfall and pest pressures, but good yields in central Mato Grosso are compensating for lower yields in other areas. As a result, Crop Consultant Dr. Michael Cordonnier raised his Brazilian corn crop estimate by 2 MMT to 112 MMT and he says production “might move a little higher” by the time harvest is complete.
• Brokerage StoneX raised its Brazilian corn crop estimate by 2.5 MMT to 119.3 MMT. The safrinha corn harvest in Brazil was 31% done as of late last week, according to AgRural.
• South Korea tendered to buy up to 140,000 MT of optional origin corn to be sourced from the U.S., Black Sea/eastern Europe, South America or South Africa.
• December corn left a gap between Friday’s low at $6.04 1/2 and today’s high at $6.02, falling as low as $5.71, the contract’s lowest intraday price since Feb. 4. Bears may be targeting the February low of $5.65.

Soy complex futures are broadly lower, with new-crop soybeans down around 55 cents, August soymeal down more than $6 and August soyoil down more than 400 points.

• November soybeans gapped lower at today’s open and tumbled to the lowest levels since late January on expectations weekend rains and crop-favoring weather will boost yield prospects.
• The Northern U.S. Plains and most of the Midwest “will see waves of rain periodically through the weekend with showers next week becoming a little less impressive, but will still occur periodically,” World Weather said. “Significant relief is expected to dryness in parts of Illinois, Indiana and Ohio.”
• Rains may help lift recently-slipping USDA crop ratings. USDA rated 65% of the U.S. soybean crop good-to-excellent as of June 26, down from 68% a week earlier but up from 60% at the same date a year earlier.
• USDA reported 354,987 MT (13.0 million bu.) of soybeans inspected for export during the week ended June 30, down from 475,556 MT the previous week. Expectations ranged from 400,000 to 500,000 MT.
• Indonesia raised the palm oil export quota in a bid to cut soaring inventories of the edible oil, a trade ministry official said on Tuesday, without providing specific details. Industry officials warned farmers faced an “emergency” due to falling prices amid the inventory backlog caused by a three-week export ban that ended May 23.
• StoneX also raised its Brazilian soybean crop estimate by 2.6 MMT to 127 MMT.
• November soybeans left a gap on its daily bar chart with today’s weak open and sank to $13.35, the contract’s lowest intraday price since $13.33 on Jan. 28.

Wheat futures are sharply lower, led by declines of 30-plus cents in HRW and HRS contracts.

• Wheat futures extended last week’s nosedive amid heavy, chart-driven fund selling and expanding harvest pressure. Signs of progress in efforts to ship grain out of Ukraine are also weighing on futures.
• Ukraine is holding talks with Turkey and the United Nations (UN) to secure guarantees for grain exports from Ukrainian ports, President Volodymyr Zelenskyy said Monday. “Talks are in fact going on now with Turkey and the UN (and) our representatives who are responsible for the security of the grain that leaves our ports,” Zelenskyy said at a news conference.
• USDA reported 111,830 MT (4.1 million bu.) of wheat inspected for export during the week ended June 30, down from 352,894 MT the previous week. Expectations ranged from 300,000 to 500,000 MT.
• Statistics Canada reported all-wheat plantings at 25.4 million acres, above the 24.7 million acres traders expected.
• Egypt purchased around 444,000 MT of wheat, including 214,000 MT Russian, 170,000 MT French and 60,000 MT Romanian. South Korea tendered to buy up to 130,000 MT of optional origin feed wheat, excluding Argentina, Pakistan, Denmark and China.
• September SRW wheat futures dropped to $8.42 1/2, the contract’s lowest intraday price since $8.38 3/4 on Feb. 23. September HRW and spring wheat also dropped near five-month lows.

Cattle futures are lower at midmorning, led by declines in live cattle.

• Live cattle are under spillover liquidation pressure from broad-based selling, as steep declines in grains and crude oil, along with U.S. stock, reflect growing recession worries.
• Despite strength in cash markets last week, traders appear pessimistic over beef demand following the July 4 holiday. Demand typically slumps until retailers start making purchases for Labor Day features around mid-August.
• Wholesale beef has weakened as retail demand slipped. Choice beef cutout values ended last week at $263.82, down $1.16 from a week earlier and the third straight weekly decline.
• Cash cattle averaged over $146.00 last week through Friday morning, up from the previous week’s average of $144.55.

Hog futures are mixed, with summer contracts firmer and deferreds lower.

• Nearby lean hogs are posting solid gains amid corrective buying following a two-week slide. Gains may be limited by beliefs the cash market has peaked.
• The CME lean hog index is down 14 cents to $110.70, the third straight decline. Recent cash erosion suggests the summer high has been posted, and current futures structure signals a seasonal pullback in cash prices.
• Pork cutout values ended last week at $108.75, down $3.45 from a week earlier and the second straight weekly decline.
• 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.