Market Snapshot | November 9, 2022

Livestock producers: Cover corn-for-feed needs through November… December corn futures dropped below our target at $6.65. We advise livestock producers to cover all corn-for-feed needs in the cash market for the remainder of November. Be prepared to extend coverage on additional price pressure.

Corn futures are 4 to 5 cents lower at midsession.

• Corn futures are trading near two-month lows after a break under some key chart levels spurred technical selling.
• USDA’s Crop Production and Supply & Demand updates at 11 a.m. CT are expected to feature only minor changes. USDA is expected to lower its estimate for U.S. corn production about 8 million bu. from an October forecast to 13.887 billion bu., which would be down 1.187 billion bu. from the 2021 crop, based on a Reuters survey of analysts. U.S. corn stocks at the end of 2022-23 may be revised up about 35 million bu. to 1.207 billion bu.
• U.S. ethanol production averaged 1.051 million barrels per day (bpd) during the week ended Nov. 4, up 1.2% above the corresponding week last year for the first year-over-year increase since the week ended Sept. 9. Ethanol stocks dropped 40,000 barrels to 22.192 million barrels.
• Brazilian crop supply agency Conab trimmed its forecast of the country’s 2022-23 all-corn crop to 126.4 MMT, compared with its previous forecast of 126.94 million.
• December corn extended overnight declines and fell as low as $6.59 1/4, the contract’s lowest intraday price since Sept. 8.

Soybeans are 6 to 10 cents higher and December soyoil is up around 100 points, while December soymeal is down around $1.

• Soybeans rebounded from overnight declines to post modest gains at midmorning, helped fresh export business and strength in soyoil and palm oil markets.
• USDA reported daily soybean sales of 264,000 MT for delivery to China and 198,000 MT for delivery to “unknown destinations,” both for the 2022-23 marketing year. On Tuesday, USDA reported soybean sales totaling 414,700 MT to China, Mexico and unknown destinations. 
• USDA is expected modestly increase its estimate for U.S. soybean production to 4.315 billion bu. from 4.313 billion bu., based on the Reuters survey. U.S. 2022-23 ending stocks may be boosted about 12 million bu. to 212 million bushels.
• Brazil is expected to produce a record 153.5 MMT of soybeans this year, up 1.2 MMT from its prior forecast, according to Conab. The Brazilian crop estimating agency raised its soybean acreage forecast by 350,000 hectares.
• Argentine farmers as of last week sold about 72% of the current soybean harvest, government data showed. During the same time last season, farmers sold a little over 73% of the harvest.
• January soybeans are trading roughly within the previous session’s range, slightly above the 200-day moving average around $14.45 1/2 but under Tuesday’s six-week intraday high at $14.69.

Wheat futures are lower, led by declines of 12 to 14 cents in SRW contracts.

• SRW wheat led the market lower, dropping to two-month lows on slumping technicals, dollar strength and soft export demand.
• USDA is expected to further lower its forecast for global wheat endings stocks for 2022-23, already at a six-year low, to about 266.52 MMT from 267.54 MMT. USDA is expected to modestly raise projected U.S. ending stocks by about 2 million bu. to 578 million bu., which would still be the lowest in 15 years.
• France’s ag ministry trimmed its forecast for 2022-23 French wheat exports outside the European Union to 10 MMT, down 100,000 MT from its prior outlook. The ag ministry also lowered its forecast for wheat exports within the 27-nation bloc to 6.94 MMT, down 130,000 MT from its previous figure
• Algeria purchased 480,000 MT of optional origin milling wheat, the bulk of which is expected to be sourced from Russia. Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil. Japan is seeking 70,000 MT of feed wheat and 40,000 MT of feed barley.
• December SRW wheat fell as low as $8.09 3/4, the contract’s lowest intraday price since Sept. 7.

Live cattle are lower at midmorning while feeder cattle are mostly firmer.

• Live cattle are under mild pressure as a slow-developing cash market mutes buying interest in futures.
• Packers have been slow to establish bids for slaughter-ready animals, while feedlots are asking around $2 higher in the Southern Plains. Firmer cash trade is eventually expected to surface, though it appears late-week action is likely. Strong wholesale beef trade may support futures.
• Feeder cattle are gaining modest support from corn’s drop near two-month lows.
• Choice beef cutout values rose 39 cents Tuesday to $264.94, near a three-month high reached last week. Movement was strong at 151 loads.
• December live cattle dropped under the 10-day moving average at $152.45 before rebounding to claim back some of the initial declines.

Hog futures are mixed, with December down slightly but some deferred contracts firmer.

• Nearby hog futures are under mild followthrough pressure from Tuesday’s sharp declines and slumping cash fundamentals tied to a seasonal rise in slaughter.
• The CME lean hog index is down another 60 cents to $90.28 (as of Nov. 7), the lowest since mid-February, though the national direct cash hog price firmed $2.45 on Tuesday. Further gains in direct prices could suggest a short-term low in the CME index.
• Wholesale pork remains under pressure. Pork cutout values fell $1.92 Tuesday to $95.03, the lowest since early February. December lean hogs fell $1.475 to $85.575.
• December lean hogs fell below the 100-day moving average around $84.65.