10:30 Market Snapshot | July 12, 2022

Corn futures are posting losses of 20-plus cents.

• Corn futures are facing heavy selling on followthrough from sharp overnight losses and ahead of USDA’s July crop reports at 11 a.m. CT.
• USDA is expected to raise its U.S. old-crop ending stocks forecast by 3 million bu. to 1.488 billion bu. in the Supply & Demand Report, based on a Reuters survey. The 2022-23 ending stocks projection is expected to increase 42 million bu. to 1.442 billion bushels. Global corn ending stocks are also expected to rise modestly for both marketing years.
• USDA’s corn crop condition ratings held steady at 64% “good” to “excellent,” though there was a one-point shift up in the top category. USDA rated 10% of the crop “poor” to “very poor,” up a point from last week. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop improved 1.1 points to 365.2, though that was still 3.6 points below the five-year average for the second week of July.
• Forecasts are hot and mostly dry weather over the next two weeks across the Corn Belt. But based on this morning’s price action, traders aren’t concerned.
• December corn futures filled Monday’s chart gap overnight and have sharply extended losses, dropping below the 200-day moving average. Next support is the psychological $6.00 mark.

Soybean futures are around 35 cents lower, with soymeal down $3 to $6 and soyoil more than 200 points lower this morning.

• Soybean futures are under heavy pressure after sharp losses overnight and spillover from outside markets.
• Traders are finalizing positions ahead of USDA’s Supply & Demand Report. They expect USDA’s old-crop soybean ending stocks to rise by 3 million bu. to 208 million bushels. But the new-crop carryover projection is expected to fall by 69 million bu. as USDA incorporates lower planted acreage from the June Acreage Report. World soybean ending stocks are expected to rise slightly for old-crop and decline for 2022-23.
• USDA’s soybean crop ratings dropped one percentage point to 62% “good” to “excellent.” USDA rated 9% of the crop “poor” to “very poor,” unchanged from the previous week. On our weighted CCI, the soybean crop rose 1.5 points to 356.4, which was a modest 0.8 point above the five-year average for the date.
• Forecasts are hot and mostly dry condition over the next two weeks across major U.S. cropping areas. But price action signals traders aren’t concerned.
• November soybean futures overnight filled the 2-cent gap left on the daily chart yesterday and dropped below the 200-day moving average. Next solid support is last week’s low at $13.02 1/2.

Wheat futures are mostly 10 to 12 cents lower in SRW contracts; around 20 cents lower in HRW and HRS contracts.

• Wheat futures are facing followthrough selling after weak closes on Monday and a sharp decline overnight.
• Wheat ending stocks for 2021-22 were set at 660 million bu. by June 1 stocks. Traders expect USDA to modestly raise its 2022-23 wheat ending stocks forecast to 638 million bu. later this morning. Global wheat ending stocks for both 2021-22 and 2022-23 are expected to decline slightly from last month.
• USDA will release its first U.S. all-wheat production estimate, including the first survey-based forecasts for other spring wheat and durum. Traders expect a slightly bigger all wheat crop estimate of 1.745 billion bu., including winter wheat production of 1.186 billion bu. and other spring wheat crop of 458 million bushels.
• USDA rated 70% of the U.S. spring wheat crop as “good” to “excellent,” up four points from the previous week. The portion of crop rated “poor” to “very poor” dropped three points to 5%. That equated to a 7.2-point rise on the CCI to 375.6, which was 42.0 points above the five-year average, which included last year’s drought ravaged crop.
• December SRW wheat futures found mild support on the drop below the $8.50 level.

Live cattle futures are narrowly mixed. Feeder cattle are moderately to sharply higher.

• Live cattle futures opened firmer after high-range closes on Monday, but buyer interest faded as traders wait for direction from the cash market.
•  Last week’s cash cattle price averaged $144.35, down $1.81 from the previous week. Initial expectations are for steady to weaker cash prices again this week.
• Boxed beef prices firmed on Monday, with Choice up 25 cents and Select $1.15 higher. Movement was relatively light at 113 loads. With fill-in buying likely complete after the July 4 holiday and a typically lighter demand period ahead, retailers are likely to be selective buyers.
• Feeder cattle are being supported by the sharp drop in corn prices.

Hog futures are mixed at midmorning.

• July lean hog futures are holding near unchanged given the premium the contract holds to the cash index. August hogs are weaker despite their discount to the cash index, suggesting traders sense a seasonal top in the cash market is close.
• The CME lean hog index is up 81 cents again today at $111.77. July hogs are trading more than $1 above that level just days ahead of contract expiration and settlement.
• The pork cutout value firmed 40 cents on Monday as declines in ribs and hams were more than offset by gains in the other cuts. Movement was solid at 330.3 loads.