Market Snapshot | October 6, 2022

Corn futures are under pressure from the accelerating U.S. harvest and concerns a strong U.S. dollar and potential recession will crimp demand for commodities.
“Good harvest progress will continue through the next two weeks with rain events Tuesday into next Thursday and Oct. 15-16 likely to cause only temporary interruptions to fieldwork,” World Weather Inc. said today.
Sluggish export demand is also weighing on prices. USDA today reported net U.S. corn sales totaling 227,000 MT during the week ended Sept. 29, down from 512,000 MT the previous week and under trade expectations ranging from 350,000 to 800,000 MT. Weekly exports totaled 629,800 MT.
December corn pushed slightly under trendline support around $6.77 and is leaning on support at the 10-day moving average around $6.75.

The soy complex joined a slump in grain futures amid strength in the U.S. dollar and increasing harvest pressure. Prospects for a large South American crop are longer-term bearish.
Net weekly U.S. soybean sales totaled 777,100 MT, with top buyers including Mexico (233,400 MT) and China (157,100 MT, including decreases of 5,400 MT). Sales were down from 1.003 MMT a week ago but within expectations ranging from 500,000 MT to 1.2 MMT.
Brazilian farmers are expected to increase soybean planted area by 3.4% to a record 42.9 million hectares, according to the initial forecast from Conab. The Brazilian crop estimating agency forecasts the 2022-23 Brazilian soybean crop at a record 152.4 million metric tons (MMT), which would be up 21.3% from this year.
Malaysian palm oil futures rose 1.6%, a sixth straight daily gain, on weather concerns.
November soybeans extended overnight declines and broke under both the early-week low and the August low to drop to $13.50, the contract’s lowest intraday price since July 25 and partially filling a gap in the daily chart.

Wheat futures are under pressure from dollar strength and eroding technicals, as well as tepid exports.
USDA reported net weekly wheat sales of 229,400 MT, down from 279,800 MT last week and at the low end of trade expectations ranging from 200,000 to 450,000 MT. Export commitments are running 4.3% behind a year-ago, compared with 3.5% ahead of last week.
Dryness in the Plains remains a concern. A large section of the U.S. Central and Southern Plains “continues to suffer from varying levels of drought or abnormally dry conditions,” World Weather Inc said today.
Ukraine’s winter grain sowing area for the 2023 harvest unlikely will exceed 2 million hectares and production could fall by at least 50%, the head of a large Ukrainian agriculture company said.
Soil moisture reserves are low in Russia’s southern Krasnodar, Rostov and Stavropol regions – the main wheat producing and exporting areas of the country. Low soil moistures pose risks for next year’s harvest if weather conditions don’t improve.
Japan purchased 97,343 MT of milling wheat from its weekly tender, including 64,523 MT U.S. and 32,820 MT Canadian.
December SRW wheat extended overnight declines and fell as low as $8.82, the contract’s lowest intraday price since Sept. 28. The 20-day moving average is right at today’s low.

Nearby live cattle are firming a little amid signs of increased cash cattle trade.
Limited numbers of cattle have traded so far this week at roughly steady prices compared with last week. Bids are firming a little in some locations this morning.
USDA reported net weekly beef sales of 16,400 MT for 2022, down from 21,500 MT the previous week. Top buyers included South Korea (6,000 MT), Japan (2,200 MT) and China (2,100 MT).
December live cattle are trading within Wednesday’s range after moving above the 100-day moving average around $147.75.

Hog futures are moderately to sharply higher.

Lean hogs gapped higher as the market extended Wednesday’s sharp corrective recovery from the recent selloff.
Cash fundamentals remain soft. The CME lean hog index is down 51 cents to $92.93 (as of Oct. 4), near an eight-month low, and has dropped nearly $30 since the first week of August.
Pork cutout values rose $1 Wednesday to $99.29 on lighter movement of 282 loads. December lean hogs jumped $2.075 to $76.50.
USDA reported net weekly U.S. pork export sales totaling 34,300 MT for 2022, matching the previous week’s total. Sales commitments so far this marketing year are running 18% below the same period last year.
December lean hogs gapped higher and surged above the 10-day moving average around $77.25, reaching $78.10.

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