Market Snapshot | February 1, 2023

Corn futures are posting 1- to 2-cent losses at midmorning.

• Corn futures are marking losses for the third straight session on spillover weakness in wheat and crude oil futures.
• Ukrainian agricultural producers said this week the 2023 grain harvest will likely fall to 35 MMT to 40 MMT, down from 51 MMT in 2022. A Ukrainian official wasn’t quite as pessimistic, saying production could slip to 49.5 MMT this year.
• World Weather Inc. notes the month of February is expected to continue like recent weather the first half of the month, including timely rainfall, though moisture totals will be lighter than usual with some areas much drier than others.
• U.S. corn was offered at the lowest price in Egypt’s tender to buy an unspecified amount of corn. But trade sources say Egypt is believed to have cancelled the tender.
• March corn is trading narrowly, dipping below the 100-day moving average at $6.74 3/4. Support extends from the 20-day average around $6.70 1/2 to the Jan. 23 low at $6.61 1/4.  Initial resistance stands at the 10-day moving average of $6.77 1/4.

Soybeans are 8 to 14 cents lower in old-crop contracts, with new-crop 3 to 5 cents lower. March meal futures are around 50 cents higher and March soyoil is down around 150 points.

• Soybeans are facing corrective selling after a steady climb higher over the past five sessions.
• Hot, dry weather led the U.S. ag attaché in Argentina to slash its estimate of the country’s soybean crop to 36 MMT, 9.5 MMT below USDA’s official January forecast.
• Argentina’s revenue from grain and soy exports fell 61% in January from a year-go and 75% from December, as the world’s largest exporter of soyoil and meal battles a severe drought.
• Brazil’s weather may be a little less intensive on rainfall through the weekend, though totally dry weather is not likely, according to World Weather.
• Traders anticipate USDA this afternoon will report December soybean crush at 188.0 million bu., which would be down from 189.5 million bu. in November and well below December 2021 crush of 198.2 million bu.
• March soybeans dipped as low as $15.21 1/2, below initial support at $15.27 with additional support lying near $15.16 1/4. Initial resistance stands at $15.46 1/4.

SRW wheat futures are posting 2- to 5-cent losses, while HRW is around 2 cents higher. HRS futures are 3 to 6 cents higher.

• SRW wheat futures are lower, despite a weaker U.S. dollar as traders continue to assess weather in the U.S. Plains.
• Soft wheat exports from the EU in the 2022-23 season that began July 1 had reached 18.78 MMT by Jan. 29, according to European Commission data. This compares to 17.43 MMT by the same period in 2021-22.
• Texas precipitation today and tonight will fall largely as freezing rain and some snow, with freezing rain in southern Oklahoma causing power outages, according to World Weather.  
• March SRW is trading narrowly, with initial support lying at the 40-day moving average of $7.51, while initial resistance stands at $7.71 1/4.  

Live cattle are modestly lower, while feeders are posting sharp losses.

• Live and feeder cattle futures are lower despite neutral to bullish data in USDA’s Cattle Inventory Report released Tuesday afternoon.
• USDA estimated the U.S. cattle herd at 89.274 million head as of Jan. 1, down 2.803 million head from last year, with the 2022 calf crop estimated at 34.465 million head, down 701,000 head from the previous year. The total cattle herd and last year’s calf crop were the smallest in eight years.
• USDA reported the beef cow herd dropped 1.065 million head (3.6%) to 28.918 million head, which is the smallest since 1962.
• The number of beef heifers expected to calve in 2023 fell 171,000 head (5.1%) and total beef replacement heifers dropped 318,000 head (5.8%)—the smallest number held back for breeding since 2011.
• April live cattle traded as low as $162.30, just below initial support $162.39. Initial resistance stands at near $163.46.

Deferred hog futures are posting heavy losses at midmorning.

• February lean hog futures are mildly firmer at midmorning.
• April lean hogs are posting sharp losses after gapping lower to start the session as traders continue to wait for a clear sign that a seasonal bottom has formed in the cash market.
• Following four days of slight gains, the CME lean hog index is down 13 cents to $72.58 as of Jan. 30.
• Pork cutout values fell 3 cents on Tuesday to 80.25, with loads steady at 319.83 on the day.
• April lean hogs dipped as low as $84.225, below the 10-day moving average of $85.695 and support near $85.15. Next support is around $83.94. Initial resistance stands at the 20-day moving average of $87.90.