Market Snapshot | August 29, 2022

Corn futures are 10 to 13 cents higher at midsession and near two-month highs.

• Corn futures rose to the highest prices in over two months as Pro Farmer’s U.S. crop estimates underscored expectations that production prospects suffered from extreme Midwest heat and dryness.
• After Friday’s close, Pro Farmer estimated 2022 U.S. corn production at 13.759 billion bu. and average yield at 168.1 bu. per acre.
• Beneficial rain fell over much of the Midwest during the weekend, though many areas missed out, including southeastern Missouri to Kentucky and southern Indiana, along with parts of east-central and southeastern South Dakota to southwestern Minnesota, World Weather said.
• More than 1 MMT of grains and other foods have so far been exported from Ukrainian ports since shipments resumed. However, millions of metric tons of grains from previous years still need to be cleared to make room for this year’s harvest, a United Nations coordinator said.
• USDA reported 689,052 MT (27.1 million bu.) of corn inspected for export during the week ended Aug. 25, down from 821,533 MT the previous week and within expectations ranging from 500,000 to 850,000 MT.
• Traders await USDA’s weekly crop condition update after today’s close. A week ago, USDA reported the U.S. corn crop 55% in “good” or “excellent” condition as of Aug 21, down from 57% a week earlier.
• December corn futures reached $6.81 1/4, the contract’s highest intraday price since $6.92 3/4 on June 23. A push above the late-June highs may have bulls targeting $7.00.

Soy complex futures are mixed, with soybeans down 14 to 15 cents, October soymeal up more than $1 and soyoil mixed.

• Soybean futures are under pressure from expectations rains across much of the Midwest over the weekend will boost yield potential.
• Much of the Midwest “has adequate soil moisture in place to favorably support late crop development during the next two weeks while warm temperatures and infrequent rain will allow crop maturation to occur favorably as well,” World Weather said.
• Pro Farmer estimated the 2022 U.S. soybean crop at 4.535 billion bu., which would be a record, and the average yield at 51.7 bu. per acre.
• USDA last week reported 57% of the U.S. soybean crop in “good” to “excellent” condition as of Aug. 21, down from 58% a week earlier
• USDA reported 436,851 MT (16.1 million bu.) of soybeans inspected for export during the week ended Aug. 25, down from 686,827 MT the previous week and short of trade expectations ranging from 500,000 to 825,000 MT.
• Indonesia will set its crude palm oil (CPO) reference price for Sept. 1-15 at $930.02 per MT, up from $900.52 per metric ton for Aug. 16-31. The price reference would put Indonesia’s CPO export tax at $124 per metric ton for the period, up from the current $74 per metric ton. Indonesia also extended its export levy waiver until Oct. 31.
• November soybeans overnight fell as low as $14.40 1/4 after ending last week at $14.61 1/4, a gain of 57 cents for the week and the contract’s highest close since July 29.

Wheat futures are sharply higher, led by gains of around 30 cents in SRW contracts.

• Winter wheat futures surged to one-month highs as spillover strength from corn and chart-based buying after prices broke above the recent trading range overshadowed the U.S. dollar’s jump to a two-decade high.
• Canadian farmers are expected to harvest more wheat than expected, the government’s first official harvest estimates showed today. Statistics Canada estimated all-wheat production at 34.6 MMT, 55% over last year, and exceeding the industry's average estimate of 34 million.
• Traders await USDA’s weekly update on spring wheat harvest progress. USDA last week reported U.S. spring wheat crop conditions at 64% “good” to “excellent” as of Aug. 21, unchanged from the previous week. Spring wheat harvest was 33% complete, up from 16% but still behind the 54% five-year average for that date.
• Kazakhstan plans to scrap wheat and flour export quotas next month, Agriculture Minister Yerbol Karashukeyev said. The country introduced the export limits in May to keep the local market stocked and cool inflation linked to rising global food prices.
• USDA reported 520,791 MT (19.1 million bu.) of wheat inspected for export during the week ended Aug. 25, down from 594,391 MT the previous week. Trade expectations ranged from 250,000 to 650,000 MT.
• Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat.
• December SRW wheat rose as high as $8.38 1/2, the contract’s highest intraday price since July 29.

Live cattle futures are mostly lower at midmorning while feeders are sharply lower.

• Feeder cattle are being pressured by strength in the corn market.
• Live cattle futures extended last week’s drop and fell near four-week lows on erosion in cash and wholesale beef markets.
• The cash market’s outlook this week is unclear. Market-ready supplies are tightening and feedlots are current on marketings, but packers were passive buyers last week. This week’s cash cattle trade isn’t likely to turn active until midweek or later.
• Live steers averaged $144.54 through Friday morning, down $2.34 from the previous week’s average and breaking a run of three consecutive weekly gains.
• Choice beef cutout values fell 78 cents Friday to $262.76, down $1.52 for the week. Movement totaled 101 loads.
• October live cattle fell as low as $142.675, the contract’s lowest intraday price since Aug. 3 and just above 40-day moving average support around $142.60. Further weakness may have bears targeting the 50-day moving average around $142.15.

Hog futures are moderately firmer.

• Lean hog futures are higher on corrective buying from last week’s selloff. Weak cash continues to hang over the market.
• The CME lean hog index is down $2.73 today (as of Aug. 25) to $113.32, the lowest since July 12 and nearly $9 below the early August seasonal peak. October futures finished Friday $22.67 below that level.
• Pork cutout values fell 43 cents Friday to $102.23, down nearly $15 the week, but movement was strong at 330.5 loads.
• China’s state planner said it will release pork reserves from September to ensure meat supply during upcoming holidays when demand typically increases. Pork prices have risen rapidly in recent months amid tighter supplies.
• Also, China’s sow herd at the end of July totaled 42.98 million head, according to the country’s ag ministry, up 0.5% from June but down 5.3% from last year.
• October lean hogs climbed briefly above Friday’s high after ending last week at $90.65, down $2.475 for the week. Initial support comes in at the seven-week low of $90.00 posted Aug. 25.