Market Snapshot | January 20, 2023

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Corn futures are narrowly mixed at midmorning in light, two-sided trade.

  • Corn is swinging to both sides of unchanged. Profit-taking is competing with improving weather prospects in Argentina.
  • Southern Argentina began receiving significant rain overnight, with the entire nation expected to see significant rain by the end of the month, which will improve field and crop conditions, says World Weather Inc.
  • USDA reported corn export sales of 1.132 MMT for week ended Jan. 12, a sharp increase from the previous week and the four-week average. Sales were over 330,000 MT above the expected range of 250,000 and 800,000 MT.
  • March corn gapped lower overnight, trading as low as $6.72 1/2, below support at the 10-day moving average of $6.74 1/2. Additional support stands at $6.70 1/4. First resistance is at $6.83.

Soybeans are steady to 6 cents lower, while March meal futures are around $4.00 lower and March soyoil is about 60 points lower.

  • Soybeans continue lower on forecast rains in Argentina, which will increase moisture across the country by the end of the month, raising prospects of late-season crop improvements.
  • USDA reported a daily soybean sale of 220,000 MT to “unknown destinations” for the 2022-23 marketing year.
  • Weekly soybean export sales totaled 986,200 MT, a 38% increase from the previous week and 48% above the four-week average. Sales were in the upper half of expectations between 600,000 MT and 1.2 MMT.
  • World Weather Inc. notes far southern Brazil, Uruguay and Paraguay are not likely to see large amounts of rain for a while and moisture stress will continue for some crop areas.
  • China’s soybean imports from the U.S. dropped 10% in 2022, while Brazilian exports fell 6% to 54.4 MT, according to customs data. Though Brazil maintained its 60% share of the Chinese soybean market, while the U.S. share slipped just under 32%.
  • China’s reopening from its strict pandemic restrictions is likely to add to global inflationary pressures as the world’s largest consumer of raw materials ramps up commodity consumption.
  • March soybeans dipped below the 10-day moving of $15.09 1/2, with additional support lying at $15.06 1/4. Initial resistance stands at $15.25 3/4.    

Winter futures are higher, led by 9- to 11-cent gains in HRW contracts.

  • Winter wheat futures are trading mildly higher on stronger-than-expected export sales data.
  • Weekly wheat export sales totaled 473,100 MT, a sharp increase from the previous week’s figure of 90,900 MT. Sales were above the range of expectations between 75,000 and 400,000 MT.
  • March SRW futures traded as low as $7.27 3/4, falling below initial support at $7.29, before rebounding. Additional support lies at $7.20 1/2, while initial resistance stands at $7.44 1/4.

Live cattle are slightly higher at midsession, while feeders are mixed.

  • Live cattle futures are firmer amid corrective buying after dropping to the lowest level since Dec. 20 in the previous session as traders wait on cash trade to materialize.
  • USDA is expected to show the feedlot inventory under year-ago for the fourth consecutive month in this afternoon’s Cattle on Feed Report. Pre-report estimates show traders expect feedlot inventories to fall 3.2% to the lowest Jan. 1 total since 2018.  December placements are expected to drop 9.0%, with marketing 5.3% under the year-ago level.
  • Choice cutout values dropped $2.57 on Thursday to $271.51, while Select rose $1.83 to $255.69, tightening the spread to $15.82.
  • Weekly beef export sales of 17,300 MT were reported for 2023. China was the top purchaser at 4,800 MT.
  • February live cattle remain within the previous session’s trading range with initial resistance standing near $156.66. Initial support lies around $155.31.   

Hog futures are solidly higher at midmorning.

  • Lean hogs are higher on corrective buying following a sharp decline since the first of the year.
  • The CME lean hog index is down another 57 cents to $73.28 (as of Jan. 18), the lowest level since the first trading session last year and nearly $49 below the August peak.
  • February lean hog futures finished $3.37 above the cash index on Thursday, but have increased it to more than $4.50 this morning.
  • Pork cutout values firmed $1.68 on Thursday, with packers moving a solid 467.3 loads on the day.
  • USDA reported weekly pork export sales of 34,100 MT for 2023. Mexico was the top purchaser for the week at 11,800 MT.
  • February lean hog futures have traded as high as $78.55, breaching initial resistance at $77.40 as well as $78.15. Initial support remains at $76.15.
 

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