Market Snapshot | July 29, 2022

Corn futures are around 11 cents higher at midmorning.

• Corn futures extended overnight gains and hit the highest prices in nearly three weeks as concerns over an August heat wave triggered buying.
• Midwest crops will come under stress next week as a heat wave descends over the western Corn Belt, World Weather Inc. said, though a high-pressure ridge may shift back toward the Rocky Mountains Aug. 8-12, allowing for potential for cooling and showers in the U.S. eastern and northern Midwest.
• “Dryness is quickly expanding across the northwestern Corn Belt and the northern U.S. Plains,” the forecaster said. “The region is already experiencing short to very short soil moisture and by the time next week’s heat wave arrives crops will be more vulnerable than ever to suffer some serious stress.”
• Ukraine is ready to start shipping grain from two Black Sea ports but no date has been set for the first shipment, Ukrainian Infrastructure Minister Oleksandr Kubrakov said.
• December corn rose as high as $6.36 1/2, the contract’s highest intraday price since July 11 and up from $5.64 1/4 at the end of last week. The new-crop contract is also up from $6.19 3/4 at the end of June.

Soy complex futures are sharply higher, with November soybeans up around 35 cents, September soymeal up more than $13 and September soyoil up more than 200 points.

• Soybean futures rose for a sixth straight session and posted a one-month high on escalating concerns August heat and dryness will crimp yield potential.
• Much of the Midwest is expected to be hotter than normal through the first half of August, with limited rainfall chances in many areas. The “most important part” of the next 10 days is the “lack of significant moisture advertised by most of the computer forecast models from Iowa, northwestern Illinois and northern Missouri northwestward into the northern Plains,” World Weather said.
• USDA reported daily soybean sales of 132,000 MT to unknown destinations for 2022-23. That marked the first daily soybean sale announcement since July 20 and just the second since June 15.
• November soybeans surged to $14.89, the contract’s highest intraday price since $15.07 3/4 on June 30 and up from $13.15 3/4 at the end of last week. The new-crop contract, currently up about $1.60 this week, is poised for its biggest weekly advance since 2004.

Wheat futures are mixed, with winter wheat contracts steady to mildly firmer and spring wheat mostly lower.

• Winter wheat futures faded from overnight gains amid profit-taking.
• Spring wheat is under pressure from strong yield estimates from this week’s crop tour through North Dakota.
• Russia’s wheat export tax for Aug. 3-9 will be 4,626.8 rubles ($74.28) per metric ton based on an indicative price of $371.90, down from 4,951.7 rubles the previous week. The tax is well below levels when it was pegged to the U.S. dollar.
• Rainfall in recent days helped ease drought conditions in some areas of Argentina, the Buenos Aires Grains Exchange said in a weekly report. The exchange reported wheat area classified as being in drought dropped nine percentage points to 35% following rains over central and southern areas of Buenos Aires and La Pampa provinces.
• South Korea purchased 40,000 MT of Canadian milling wheat. The Philippines passed on tender to buy 100,000 MT each of feed wheat and feed barley.
• September SRW wheat overnight reached $8.63 3/4, the highest intraday price since $8.69 1/2 on July 12, but has since cut most of today’s advance. The contract is still up from $7.59 at the end of last week.

Live cattle are choppy at midmorning while feeder cattle are weaker.

• Nearby live cattle are mixed but heading for a weekly decline with the cash market poised to slip for the fourth consecutive week and the wholesale beef market extending sideways trade.
• USDA-reported live steers averaged $138.61 through Thursday morning, down from last week's average of $141.12.
• Choice beef cutout values fell 22 cents Thursday to $267.77, while movement slowed to 99 loads. Wholesale beef trade may be relatively slow for a week or two until retailers start ramping up purchases for Labor Day features.
• October live cattle fell as low as $141.425, the contract’s lowest intraday price since July and down from $143.00 at the end of last week.

Hog futures are higher, led by a strong gain in the August contract.

• Nearby hog futures extended this week’s rally to the highest levels in over three months as cash fundamentals remained strong. Gains are more limited in deferred futures.
• The CME lean hog index is up another 85 cents to $120.58 (as of July 27) and is now only $2.10 below last year’s peak, which came in mid-June. Packers are actively competing for hogs even as slaughter rates start to build, suggesting market-ready supplies are lighter than expected, though the national direct cash hog price plunged $10.86 Thursday.
• Pork cutout values jumped $2 Thursday to $128.79, the highest since June 2021. Movement was light at 223 loads.
• August hogs reached $120.85, the highest intraday price since April 19, and is up from $118.70 at the end of the last week. October lean hogs are also poised to end higher for the week.