Market Snapshot | July 20, 2022

Corn futures are 3 to 6 cents lower at mid-morning.

• Corn futures fell for the second straight session on expectations for rain and relief from extreme Midwest heat next week.
• The Central and Northern Plains, along with the southwestern Corn Belt, will receive relief from recent extreme heat and dryness gradually over the weekend and next week, World Weather Inc. said today. An initial round of rain will reach the Central Plains and southwestern Corn Belt Sunday into Monday. “Northern and eastern Midwest locations will continue favorably moist with more rain and seasonable temperatures expected to support good crop development.”
• U.S. ethanol production for the week ended July 15 increased 29,000 barrels per day (bpd) to 1.034 million bpd, up 0.6% from the corresponding week last year. Ethanol stocks dropped 53,000 barrels to 23.553 million barrels.
• December corn futures fell as low as $5.85 1/4 after dropping 15 1/2 cents Tuesday to $5.95 1/4. Initial support is seen at Tuesday’s low of $5.83 and initial resistance at the 10-day moving average around $6.03 1/4.

Soy complex futures are mostly lower, with soybeans down 22 to 26 cents

• The soy complex is under spillover pressure from weakness in crude oil and expectations for crop-friendlier Midwest weather as the key August development phase nears.
• Soybeans are finding limited buyer interest from fresh demand news.
• USDA reported a daily soybean sale of 136,000 MT for delivery to China during the 2022-23 marketing year. This was the first daily soybean sales announcement since June 9.
• November soybeans fell as low as $13.33 3/4, the lowest intraday price since July 15, after tumbling 22 cents Tuesday to $13.58 1/4. Further price weakness may have bears targeting last week’s low at $13.15 3/4.

Wheat futures are mostly firmer at midmorning.

• Winter wheat futures continued overnight gains as traders watch for news on talks in Tehran today that may lead to a resumption of grain exports from Ukraine’s Black Sea ports. Prospects a deal may be reached to resume Ukraine grain exports may limit price upside.
• Russian President Vladimir Putin expressed optimism after meeting with Turkey’s President Recep Tayyip Erdogan, who has taken on a role of middleman in Ukraine diplomacy and has been working to overcome a Russian blockade of Ukrainian grain. “Not all issues have been resolved yet, but the fact that there is movement is already a good thing,” Putin said.
• Jordan tendered to buy 120,000 MT of optional origin milling wheat.
• September SRW wheat overnight reached $8.43 1/2, the contract’s highest intraday price since $8.69 1/2 on July 12. September HRW and spring wheat contracts also hit the highest levels in over a week.

Live cattle and feeder cattle are firmer at midmorning.

• Live cattle futures are firmer strength in wholesale beef, which indicates demand is performing better than expected amid growing recession concerns.
• Choice beef cutout values rose $2.02 Tuesday to $272.57, the highest since mid-April, on movement of 133 loads, the highest daily movement since July 12. The wholesale strength suggests demand concerns may have been exaggerated.
• Feeder cattle extended gains behind weakness in corn.
• August live cattle continue to trade within yesterday’s range of $135.25 and $136.325.

Hog futures are higher, led by nearby August.

• Nearby lean hog futures gapped higher and extended the market’s rally to three-month highs behind optimism over pork demand and continued strength in cash fundamentals.
• The CME lean hog index is up $1.02 to $115.91 (as of July 18), the biggest daily advance in nearly a month and the highest since June 2021.
• Pork cutout values jumped $3.16 Tuesday to $125.12, the highest since last August and led by a gain of over $8 in hams. Movement totaled 282.4 loads.
• China’s sow herd at the end of June rose for the second consecutive month, reaching 42.8 million head, according to the country’s ag ministry. While that was up 2% from May, it was still down 6.3% from last year.
• August lean hogs rallied to $114.75. Technicals have turned increasingly bullish with August trading above most major moving averages.