Market Snapshot | July 8, 2022

Corn futures are mostly 17 to 19 cents higher at midmorning.

• Corn futures extended the market’s sharp rebound over the past three days, posting highs for the week behind spillover strength from a rally in wheat and a drier outlook for the Midwest.
• Midwest weather may turn drier starting in mid-July, World Weather Inc. said. It will be “questionable” as to how much rain will fall after Saturday, the forecaster said. Temperatures “will be milder than usual which should conserve soil moisture in those areas that got rain and were eased from dryness this week, but there will still be some areas in the southwestern Corn Belt and Delta that will be too dry.”
• USDA reported net weekly corn sales reductions of 66,600 MT for 2021-22, a marketing-year low and well under trade expectations for sales of 200,000 to 500,000 MT. Net sales for 2022-23 totaled 111,200 MT, down 36% from the average of 172,520 MT for the previous four weeks but within expectations ranging from zero to 300,000 MT.
• Russia is ready to negotiate with Ukraine and Turkey about grain exports, but it is unclear when such talks might take place, Foreign Minister Sergei Lavrov said on Friday.
• December corn reached $6.17 1/2, putting the most-active contract on track for a weekly gain after ending last week at $6.07 1/2.

Soy complex futures are higher, with new-crop soybeans up 20-plus cents and soymeal and soyoil also solidly higher.

• Soybean futures joined corn and wheat and extended this week’s corrective rebound following shar declines immediately after the long holiday weekend.
• USDA reported net weekly soybean sales reductions of 160,000 MT for 2021-22, a marketing-year low but within trade expectations. Net sales for 2022-23 totaled 240,100 MT, primarily for “unknown destinations” and within expectations ranging from 100,000 to 300,000 MT.
• Indonesia will implement 35% palm oil mix in biodiesel, known as B35, by the end of the month to help absorb excess palm oil supply, CNBC Indonesia reported, citing senior energy ministry official Dadan Kusdiana. Indonesia currently has a mandatory 30% blend of palm oil-based fuel in its biodiesel.
• China will sell 500,000 MT of imported soybeans from its state reserves on July 15. Beijing has been holding weekly auctions of soybean stockpiles to boost domestic supplies.
• November soybeans reached $13.92 but still down from $13.95 1/4 at the end of last week after posting a 5 1/2-month low of $13.02 1/2 Wednesday.

Wheat futures are sharply higher, led by gains of more than 50 cents in spring wheat.

• Wheat futures rose sharply for the second straight day as continued corrective buying and short-covering overshadowed soft export numbers.
• USDA reported net weekly wheat sales at 286,400 MT for 2022-23, down 31% from an average of 415,577 MT for the previous four weeks. Sales were at the low end of expectations ranging from 250,000 to 600,000 MT.
• Argentina's wheat-planting area for the 2022-23 harvest season is estimated at 6.2 million hectares (15.3 million acres), down from the 6.3 million hectares previously estimated, the Buenos Aires Grain Exchange said. The cut is the fourth made by the exchange since the season began in May, mainly due to unfavorable weather that has prevented many farmers from meeting their original planting targets.
• Russia’s wheat export tax for July 13-19 will be 5,558.9 rubles ($90.94) per metric ton based on an indicative price of $401.60, up from 4,635 rubles ($85.80) the previous week. The tax, however, is well below levels when it was pegged to the U.S. dollar.
• France’s ag ministry rates 63% of the country’s wheat crop as being in good or excellent condition, down one percentage point from the previous week. Crop ratings have plunged 26 percentage points since the beginning of May. The ag ministry says 14% of this year’s crop has been harvested.
• September SRW wheat reached a high for the week at $8.85 and is up from $8.46 at the end of last week.

Live cattle and feeder cattle futures are lower at midmorning after erasing initial gains.

• Live cattle futures turned lower as initial gains in nearby contracts generated little sustained buying interest. Strong cash trade continues to underpin futures.
• Light cash cattle trade was reported through Thursday, with prices steady/weaker in the Southern Plains and steady/firmer in the northern market and a roughly $11 spread between the two markets reflecting tight supplies in the north. Northern market strength likely will continue to boost overall average cash prices. USDA-reported live steers averaged $149.87 this week through Thursday morning, up sharply from last week's $146.15 average.
• Choice beef cutout values rose 2 cents Thursday to $268.07, up $4.25 since the end of last week, while movement was strong at 125 loads.
• USDA reported net weekly beef export sales at 11,000 MT, down 35% from the previous week and down 30% from the four-week average.
• Feeder cattle are mostly lower following renewed strength in corn futures.
• August live cattle are trading within Thursday’s range and is currently up slightly from last week’s close of $134.60.

Hog futures are mixed and trading in narrow ranges, with summer contracts under mild pressure.

• August lean hogs are under a corrective pullback following Thursday’s surge to two-month highs, with recent erosion in cash benchmarks adding pressure.
• The CME lean hog index is up 23 cents to $110.16 (as of July 5), the benchmark’s first gain in six days. August futures have dropped to a discount of about $1.28 to the index after briefly posting a small premium earlier this week.
• Wholesale market strength is providing some underlying support for futures. Pork cutout values rose 69 cents Thursday to $112.19, though movement, at 287 loads, continued to slow slightly. Wholesale trade this week suggests demand is solid as retailers stock up for mid-summer features.
• USDA reported weekly pork export sales totaled 31,200 MT, down 3% from the previous week but up 23% from the four-week average.
• August lean hogs fell as low as $107.925 today but are still up sharply from $102.975 at the end of last week.