Market Snapshot | October 13, 2022

Corn futures are down as the market remained under pressure a day after USDA cut its U.S. crop forecast slightly less than expected and lowered its export outlook for 2022-23.
U.S. ethanol production averaged 932,000 barrels per day (bpd) during the week ended Oct. 7, up 43,000 bpd from the previous week but down 9.7% from the corresponding week last year. Ethanol stocks increased 178,000 barrels to 21.863 million barrels.
Hard freezes in the U.S. Midwest expected over the coming weekend and early next week “should not have a significant influence on market mentality,” World Weather Inc. said today.
Due to Monday’s government holiday, USDA’s weekly export sales data for the week ended Oct. 6, is pushed back until Friday morning.
December corn is trading within Wednesday’s range after dropping as low as $6.84, just under the 10-day moving average at $6.86. Further support is seen around $6.80, matching a trendline drawn from the July low.

Soybeans are under pressure from mild profit-taking and corrective selling following Wednesday’s rally, which was triggered by USDA’s unexpected cut to its U.S. crop forecast.
USDA reported daily soybean sales totaling 264,000 MT for delivery to China and 242,000 MT for delivery to “unknown destinations,” both for the 2022-23 marketing year. Today’s sales follow USDA’s announcement Wednesday of a soybean sale totaling 526,000 MT to China in 2022-23.
In its monthly Supply and Demand update Wednesday, USDA hiked its Brazil crop estimate by 3 MMT to 152 MMT.
“Favorable conditions for fieldwork will occur in much of Brazil and Paraguay through the next two weeks,” World Weather said. “Most areas outside of the drier areas in the north have enough soil moisture to support planting and establishment of summer crops during the next two weeks.”
November soybeans dropped back under $14.00 and are trading within the previous session’s range after hitting resistance at the 20-day moving average around $14.06.

Wheat futures rebounded from overnight declines after reports Russia may not agree to renew a deal allowing Ukrainian grain exports from Black Sea ports.
Moscow has submitted concerns to the United Nations about an agreement on Black Sea grain exports and is prepared to reject renewing the deal next month unless its demands are addressed, Russia’s UN ambassador in Geneva told Reuters today.
Dryness remains concerning in the U.S. Plains as winter wheat planting continues. Dryness is expected in the HRW belt the next week, with the exception of the southern 25% of the region, World Weather said. “Most of the wheat region will remain drought-stricken and in need of significant rain.”
Argentina’s government is set to meet with wheat millers and exporters today amid concerns over the size of this year’s crop due to a severe and ongoing drought, a government official and an industry source told Reuters.
Japan purchased 94,140 MT of milling wheat in its weekly tender, including 25,390 MT U.S., 35,867 MT Canadian and 32,883 MT Australian. The Philippines tendered to buy 165,000 MT of feed wheat from unspecified origins. Iraq canceled its tender to buy at least 50,000 MT of wheat.
December SRW wheat overnight broke under trendline support around $8.79 and fell as low as $8.63, the contract’s lowest intraday price since Sept. 28. But the contract bounced back to post a session high at $9.03 1/2.

Live and feeder cattle are mostly higher in midmorning trade.

Nearby October live cattle futures are up slightly on expectations for firmer cash prices, but deferred contracts are under mild pressure amid uncertainty over the economy.
Cash cattle activity is getting started around $145 in the Southern Plains, which is steady to firmer compared to trade in the region last week.
Packer margins fell into the red recently, slowing cash negotiations this week, but the slaughter pace is showing no signs of letup, suggesting firmer cash prices are likely this week.
Estimated cattle slaughter through Wednesday stood at 384,000 head, up 1,000 head from last week and 28,000 head (7.9%) greater than the same period last year.
Choice beef cutout values fell 9 cents Wednesday to $246.66, near an 18-month low posted in late September, but movement was strong at 128 loads.
December futures dropped under the 10- and 20-day moving averages and fell as low as $147.55 before rebounding.

Hog futures are mixed, with nearby contracts firmer and deferreds weaker.

December lean hogs extended a two-week rally to post fresh highs for the month on strong technicals and ideas cash fundamentals are firming.
The CME lean hog index is down 46 cents to $92.49 (as of Oct. 11), an eight-month low.
Wholesale pork has continued strengthening. Pork cutout values rose 79 cents to a three-week high of $103.94. The recent uptick in the pork cutout has pushed packer margins back into the black, which should help ease some of the typical seasonal cash weakness.
December hogs rose as high as $81.15, the contract’s highest intraday price since Sept. 26.

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