Market Snapshot | September 6, 2022

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Corn futures are 2 to 4 cents higher at midsession.

  • Corn futures are mostly higher following the three-day holiday weekend as traders watch for initial harvest reports. Reduced yield prospects from extreme heat earlier this summer continue to support prices.
  • Rainfall reached much of the eastern Midwest over the weekend, with greatest totals in the Ohio River Basin. Southern Illinois, southern Indiana, western, central and southwestern Ohio and portions of Kentucky received 1 to 3 inches, with local totals of over 5 inches, World Weather Inc. said. Much of the western Corn Belt was dry.
  • Traders await USDA’s weekly crop condition updates after today’s close. A week ago, USDA reported 54% of the U.S. corn crop in “good” or “excellent” condition as of Aug. 28, down from 55% the previous week. Corn condition ratings have been on a steady decline for nearly two months.
  • USDA reported 518,373 MT (20.4 million bu.) of corn inspected for export during the week ended Sept. 1, down from 689,451 MT the previous week and at the low end of trade expectations ranging from 500,000 to 825,000 MT.
  • December corn futures reached $6.73 1/4 before hitting resistance at the 100-day moving average at $6.73 3/4. The contract ended last week at $6.65 3/4, up 1 1/2 cents for the week.

Soy complex futures are lower, with soybeans down around 24 cents, October soymeal down about $12 and October soyoil down more around 300 points.

  • Soybeans are under pressure from generally crop-friendly Midwest weather and prospects for greater supplies from Argentina. Weakness in palm oil also weighed on the soy complex.
  • Argentina boosted the exchange rate for its soybean exports in a bid to increase lagging shipments. For September, the exchange rate for Argentine soybean farmers will be 200 pesos per U.S. dollar, up from the previous rate of 139 per dollar, the official exchange rate.
  • USDA will update crop condition ratings after the close this afternoon. USDA rated 57% of the U.S. soybean crop “good” to “excellent” as Aug. 28, unchanged from a week earlier and better than expectations for 56%.
  • USDA reported 495,845 MT (18.2 million bu.) of soybeans inspected for export during the week ended Sept. 1, up from 439,811 MT the previous week and at the low end of trade expectations ranging from 400,000 to 800,000 MT.
  • Strategie Grains cut its forecast for this year’s European Union sunflower seed, citing damage from recent dry and hot weather. The firm now estimates EU sunflower seed production at 9.17 MMT, down nearly 1.2 MMT from its previous forecast and down 11.3% from last year.
  • Malaysia's palm oil inventories at the end of August likely rose above 2 MMT for the first time in more than two years, lifted by a jump in production, a Reuters survey showed. Stockpiles jumped 15% from the month before to 2.03 MMT, the highest since April 2020. Output in the world's second largest producer climbed 8% to 1.7 MMT, hitting a 10-month peak.
  • November soybeans extended declines after dropping below support at the 40- and 50-day moving averages, which converge around $14.00 to $14.00 3/4. The contract fell as low as $13.92 1/4, just above Friday’s low.

Wheat futures are mostly lower after erasing overnight gains.

  • Wheat futures generated little followthrough buying from overnight strength and faded amid U.S. dollar strength and prospects for stronger global production.
  • Australia’s wheat production is forecast to be the second highest ever at 32.2 MMT, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), though that would be down 11% from last year’s record.
  • Concerns over persistent dryness in the Plains as the winter wheat planting season nears may limit price weakness in futures. Restricted rain will fall in the Great Plains over the next 10 days, causing topsoil moisture in HRW areas to become depleted, World Weather said.
  • USDA reported 477,657 MT (17.6 million bu.) of wheat inspected for export during the week ended Sept. 1, down from 631,326 MT the previous week and at the low end of trade expectations ranging from 400,000 to 625,000 MT.
  • South Korea purchased 65,000 MT of Australian feed wheat. Taiwan tendered to buy 55,375 MT of U.S. milling wheat. Jordan purchased 60,000 MT of wheat and tendered to buy another 120,000 MT.
  • December SRW wheat overnight pushed slightly above the 50-day moving average to reach $8.25 before pulling back. The contract ended last week at $8.11, up 53/4 cents for the week.

Live cattle and feeder cattle are firmer at midmorning.

Hog futures are mostly higher after rebounding from initial declines.

  • October lean hogs bounced back to gains after earlier dropping to the lowest level in nearly two months. Continuing weakness in cash fundamentals may limit futures’ upside.
  • The CME lean hog index is down $1.52 today (as of Sept. 1) to $104.74, near a three-month low. National direct cash hog prices continue to fall seasonally, with the bulk of the pressure noted in the Iowa/southern Minnesota market.
  • Pork cutout values ended last week at $102.25, up 2 cents from a week earlier. Movement Friday was strong at 302.6 loads.
  • China will sell 37,000 MT of pork from state-owned reserves on Sept. 8. The sales are meant to boost domestic supplies and ease prices, which have recently spiked.
  • October lean hogs fell as low as $89.575, the contract’s lowest intraday price since July 5, before rebounding.
 

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