Market Snapshot | August 10, 2022

Corn futures are 7 to 12 cents higher at midsession.

• Corn futures approached the highest levels in over a week amid concerns a drier Midwest outlook could hamper yield potential. Traders await Friday’s USDA Crop Production Report, in which the agency is expected to estimate U.S. corn production lower than the July projection.
• The 10-day forecast for central U.S. crop areas turned drier today compared with outlooks earlier this week, but temperatures will be normal to below-normal, World Weather Inc. said. The expected weather “will slow the deterioration of crop conditions because of the milder conditions, but rain will eventually be needed.”
• U.S. ethanol production averaged 1.022 million barrels per day (bpd) during the week ended Aug. 5, down 21,000 bpd from the previous week but up 3.7% from the corresponding week last year. Ethanol stocks fell 138,000 barrels to 23.256 million barrels.
• Ukrainian exports of grains, oilseeds and vegoils reached 2.66 MMT in July, up 23% from June. The total included 412,000 MT of wheat, 183,000 MT of barley, 1.1 MMT of corn, 362,100 MT of sunflower seeds and other commodities. Exports were still down nearly 52% from year-ago.
• December corn futures rose to $6.24 1/2, matching Tuesday’s high but encountering resistance about 1 cent higher where the 40- and 200-day moving averages converge. The contract fell overnight to fill a gap in the daily chart created with Tuesday’s strong open.

Soy complex futures are broadly higher, led by a gain of more than $15 in September soymeal and 20 cents in November soybeans; September soyoil is up around 30 points.

• Soybeans extended Tuesday’s gains and reached the highest levels in over a week behind strength in soymeal, fresh export business and concerns Midwest dryness will crimp yields during critical pod-setting and pod-filling stages.
• USDA reported a sale of 196,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Today’s announcement follows two previous soybean sales to China earlier this month totaling 264,000 MT.
• USDA’s Crop Production Report Friday is expected to show slightly smaller production prospects than projected in July. The soybean crop will total 4.481 billion bu., based on a Reuters survey of analysts, down from USDA’s July projection of 4.505 billion bushels.
• Malaysia’s palm oil stocks at the end of July rose to an eight-month peak on improving production and higher imports, according to data from an industry regulator. Crude palm oil production climbed 1.84% to 1.57 MMT from June levels, while palm oil exports grew 10.72% to 1.32 MMT, MPOB said.
• November soybeans pushed above the 50-day moving average and reached $14.53 1/4, the contract’s highest intraday price since $14.81 on Aug. 1.

Wheat futures are firmly higher, led by gains in SRW wheat.

• Wheat futures climbed to the highest levels in over a week behind spillover from corn and soybean markets and strengthening technicals. Adverse crop weather in Europe is also supporting prices.
• In Europe, Romania’s recently completed wheat harvest is projected to be 15% to 18% smaller than 2021, Reuters reported, citing the country’s Agriculture Minister.
• Japan purchased 82,955 MT of wheat from its weekly tender, including 25,070 MT U.S. and 57,885 Canadian, and tendered to buy 70,000 MT of feed wheat and 40,000 MT of feed barley. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
• Recent chart patterns suggest winter wheat futures may have established a near-term bottom. September SRW wheat overnight pushed above the 10- and 20-day moving averages to reach $8.03 3/4, the highest intraday price since Aug. 1.

Cattle futures are moderately firmer at midmorning.

• Live cattle futures rebounded from Tuesday’s losses on expectations for continued firmness in cash prices and signs of stronger beef demand.
• Tightening supplies of slaughter-ready cattle and strong packer margins suggest cash prices may extend last week’s strength. Live steers averaged $140.84 last week.
• Choice beef cutout values fell $1.51 Tuesday to $264.73 but movement was strong at 154 loads, signaling firm retailer demand.
• October live cattle rose as high as $144.45, near the three-month high of $144.85 posted Monday.
• Feeder cattle are firmer despite strength in the corn market as futures rebound from yesterday’s losses.

Hog futures are mostly higher, led by the October contract.

• October lean hog futures bounced back from Tuesday’s losses to post a fresh contract high on support from ongoing cash market strength.
• The national direct cash hog price jumped $8.29 Tuesday, while the CME lean hog index rose 33 cents to $122.25 (as of Aug. 6), a 14-month high. Cash sources signal packers are pulling hogs forward to fill near-term slaughter runs.
• Pork cutout values fell 21 cents Tuesday to a three-week low at $123.85, but movement was strong at 321 loads.
• China’s pork prices in July surged 25.6% from the previous month amid production capacity cuts, farmers holding back pigs from market and a recovery in consumer demand. On an annual basis, Chinese pork prices jumped 20.2% in July, stirring speculation China may step up purchases of U.S. pork.
• October lean hogs reached $100.85, topping the previous contract high of $100.825, posted March 31.