Market Snapshot | December 8, 2022

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Corn futures are narrowly mixed at midsession.

  • Corn futures faded from overnight gains to trade narrowly mixed, as soft export continue to burden prices.
  • USDA reported net U.S. corn sales totaling 691,600 MT during the week ended Dec. 1, up from 602,700 MT the previous week. Trade expectations ranged from 300,000 to 950,000 MT. Top buyers included Mexico (333,100 MT, including decreases of 32,400 MT) and China (204,900 MT).
  • Conab trimmed its Brazilian corn crop estimate by 570,000 MT from last month to a still-record 125.8 MMT.
  • Mexico has offered to extend a deadline to ban genetically modified (GMO) corn until 2025 and is working on a proposal to overhaul its plan, the country’s Economy Minister said. The minister said President Andres Manuel Lopez Obrador could delay the contentious GMO corn ban until 2025, a year later than previously expected.
  • South Korea purchased 69,000 MT of South American corn.
  • March corn is trading within the previous session’s range. The contract may need to climb back above near-term resistance levels, including the 10-day moving average at $6.54 1/2, to spark fresh buying.

Soybeans are 8 to 12 cents higher, January soymeal is more than $6 higher and January soyoil is near unchanged.

  • Soybean futures rose a third straight day and reached the highest level since mid-September as China drives a recent uptick in export demand.
  • USDA reported daily sales of 118,000 MT of soybeans to China and 718,000 MT of soybeans to “unknown destinations,” both for the 2022-23 marketing year. With today’s announcement, USDA has reported eight separate daily sales to China or unknown destinations totaling 1.826 MMT since Nov. 23.
  • Also today, USDA reported net weekly U.S. soybean sales totaling 1.716 MMT, more than double 693,800 MT the previous week and easily surpassing trade expectations from 600,000 MT to 1.2 MMT. China led buyers at 839,600 MT, including 396,000 MT switched from unknown destinations.
  • Brazil will produce a record soybean crop of 153.5 MMT in 2022-23, according to the third estimate from Conab, unchanged from last month.
  • January soybeans overnight pushed above last month’s high of $14.78 1/2 and reached $14.82 3/4, the contract’s highest intraday price since Sept. 21. A strong close today may compel bulls to target $15.00 and the September high at $15.12 1/4.

Wheat futures are lower, led by declines of 8 to 10 cents in HRW contracts.

  • SRW wheat is trading near 14-month lows, with HRW and spring wheat are also under pressure from weak technicals and soft exports.
  • Net weekly U.S. wheat sales for 2022-23 totaled 189,900 MT, up from 155,500 MT the previous week but at the low end of trade expectations ranging from 150,000 to 350,000 MT. Lead buyers included China at 65,000 MT.
  • Japan purchased 154,957 MT of wheat in its weekly tender, including 62,902 MT U.S., 64,620 MT Canadian and 27,435 MT Australian. Philippines tendered to buy 110,000 MT of feed wheat and 135,000 MT of soymeal – both optional origin.
  • March SRW wheat rose to $7.55 1/2 but failed to top Wednesday’s high at $7.56 1/4. Key support lies at $7.23 1/2, a 14-month low posted Tuesday.

Cattle futures are firmer at midmorning, led by a sharp gains in feeders.

  • Live cattle are modestly higher on corrective buying following Wednesday’s drop to three-week lows amid strength in wholesale beef.
  • Signs a recent cash rally is leveling off are muting buying interest in futures, though tight supplies are keeping the longer-term outlook bullish. Cash cattle trade has yet to turn active, with only a few animals changing hands around steady prices in the Southern Plains thus far.
  • December live cattle futures finished Wednesday at a $4.495 discount to last week’s average cash cattle price, reflecting traders’ negative attitudes.
  • A month-long drop in wholesale beef appears to have spurred renewed demand. Choice beef cutout values surged $6.31 to $248.96 on strong movement of 174 loads.
  • USDA reported net weekly U.S. beef sales of 1,600 MT for 2022, down sharply from 15,400 MT the previous week. Lead buyers included China (4,800 MT, including decreases of 300 MT) and Japan (1,600 MT, including decreases of 1,100 MT).
  • The U.S. exported 301.1 million lbs. of beef during October, up 26.6 million lbs. from the same month in 2021 and a record for the month, data from USDA’s Economic Research Service (ERS) showed. Through the first 10 months of 2022, the U.S. shipped 2.993 billion lbs. of beef, up 5.1% from the same period last year, driven by a 26% increase in exports to China.
  • February live cattle rose to $154.075 but faded after encountering resistance at the 100- and 50-day moving averages at $154.20 and $154.125, respectively.

Hog futures are lower, led by declines of mor than $2.50 in the February contract.

  • Lean hog figures gapped lower and dropped near a seven-week low as weakness in wholesale pork and a sharp drop in exports stirred concerns over demand.
  • The CME lean hog index is down 16 cents today (as of Dec. 6) to $82.78, near a 10-month low and signaling a seasonal low is not yet in place.
  • Wholesale pork resumed a recent slide, as the cutout average plunged $5.37 to an 11-month low at $84.45, driven by a drop of over $20 in bellies.
  • USDA reported net weekly pork sales reductions of 7,900 MT for 2022, compared with net sales of 20,100 MT the previous week. Net sales of 2,400 MT were reported for 2023.
  • During October, U.S. pork exports totaled 539.7 million lbs., up 26.7 million lbs. from September and 487,000 lbs. above last year. Through the first 10 months of this year, U.S. pork shipments totaled 5.198 billion lbs., down 12.1% from the same period last year as exports to China plunged 54%.
  • February lean hogs’ weak open left a gap between Wednesday’s low at $85.95 and today’s high at $85.90. The contract fell as low as $83.475, its lowest intraday price since $83.025 on Oct. 17.
 

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