10:30 Market Snapshot | August 5, 2022

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Corn futures are 3 to 4 cents higher at midmorning.

  • Seller interest has waned in the corn market during daytime trade.
  • A “significant” rain event is expected to bring temporary relief from crop stress in the western Corn Belt through the middle of this week. But traders are starting to look beyond that, with World Weather noting a period of hot and dry conditions will follow for a week to 10 days. Conditions are expected to remain favorable in the eastern Corn Belt.
  • Three ships loaded with grain left Ukrainian ports, the Turkish defense ministry said, two from Chornomorsk and one from Odesa. The three ships were carrying a total of about 58,000 MT of corn. Meanwhile, a team of inspectors in Turkey on Friday completed checking an empty cargo ship before it heads to be loaded with grain at Chornomorsk, the Turkish defense ministry said.
  • December corn futures bounced from the 20-day moving average and pushed above Thursday’s high, which is encouraging mild chart-based buying.

Soybeans and soymeal are under heavy pressure, while soyoil futures are sharply higher.

  • Soybeans have come off their earlier lows, but bears maintain the solid upper hand.
  • Weather is price-negative with beneficial rains expected over dry areas of the western Corn Belt into the middle of next week. After that, however, World Weather says models suggest conditions will be hot and dry again for a week to 10 days. Conditions are expected to remain favorable in the eastern Corn Belt.
  • Geopolitical concerns are adding to the price pressure on soybeans. Tensions between the U.S. and China continue to escalate in the aftermath of House Speaker Nancy Pelosi’s visit the Taiwan earlier this week.
  • Soybeans are pulling no support from two daily export sales. USDA reported daily soybean export sales of 132,000 MT each to China and unknown destinations for 2022-23.
  • Soyoil futures are being supported by active spread unwinding with meal and the move higher in crude oil.

Wheat futures are lower, led by declines of nearly a dime in HRW contracts.

  • SRW wheat futures briefly followed corn to the upside, but have turned weaker again on pressure from the surging U.S. dollar.  
  • The HRW and HRS markets are also being pressured by the dollar and a lack of bullish news to close out the week.
  • After the stronger-than-expected jobs data this morning, the U.S. dollar index is up around 1,000 points. U.S. wheat export demand continues to struggle amid the strong dollar.
  • September SRW wheat futures continue to consolidate around the recent lows. above the recent lows. This week’s low at $7.52 is key near-term support. The psychological $8.00 mark is overhead resistance.

Cattle futures are stronger at midmorning, led by feeders.

  • Feeder cattle are firmer despite strength in the corn market and their big premiums to the CME feeder cattle index. That suggests traders don’t necessarily believe the strength in corn will persist.
  • Live cattle futures are pulling mild support from this week’s stronger-than-expected cash trade.
  • Cash cattle sales have been relatively light so far this week, despite steady to firmer prices. That could be a sign feedlots feel cash prices will strengthen in the weeks ahead.
  • Wholesale beef prices have weakened for three straight days, with the Choice cutout down $3.92 from Monday’s high. While prices have eased, movement has picked up, signaling solid retailer demand under the market.

Hog futures are mixed at midmorning.

  • Trade is light and choppy as traders even positions ahead of the weekend.
  • August lean hog futures are seeing limited buyer interest this morning, despite the contract’s roughly $1 discount to the cash index.
  • October hogs are being mildly supported by their bigger-than-normal seasonal discount to the cash index.
  • The CME lean hog index is up 67 cents to $121.61 (as of Aug. 3), with today’s quote 2 cents higher than prior to the two-day pullback and only $1.07 below the 2021 peak.
  • The pork cutout value followed up Wednesday’s sharp decline with a 69-cent drop yesterday.
 

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