Market Snapshot | March 9, 2023

Corn producers: Increase old-crop sales, make initial new-crop sales... USDA slashed its Argentine corn crop estimate on Wednesday and also cut U.S. exports, signaling it sees demand destruction. With a less-supportive fundamental outlook and technicals favoring bears, we advise corn hedgers and cash-only marketers to sell another 15% of 2022-crop to get to 65% priced in the cash market. We also advise all corn producers to sell an initial 15% of expected 2023-crop production for harvest delivery. 

Corn futures are posting 4- to 9-cent losses at midmorning.

• Corn is working lower for the fourth straight session, taking spillover weakness from the wheat and soy complex, despite supportive outside markets and strong weekly export sales.
• Russia said on Thursday a landmark deal to ensure the safe export of grain from Ukraine’s Black Sea ports was only being “half implemented,” raising doubts about whether it would allow an extension of the deal that is due to expire next week.
• The Rosario Grains Exchange slashed its Argentine corn crop forecast by 7.5 MMT to 35 MMT.
• USDA reported weekly sales of 1.412 MMT for week ended March 2, which was up noticeably from the previous week, and 57% from the 4-week average. Sales were near the top of the pre-report range of 600,000 MT to 1.2 MMT.
• May corn futures have fallen as low as $6.15 1/2, falling below initial support of $6.20 3/4 and signaling a downside breakout from the bear flag formation. Initial resistance is around $6.30.

Soybeans are 10 to 13 cents weaker, while May meal futures are nearly $2.00 lower. May soyoil is down around 70 points.

• Soybeans are lower on weak export sales data, despite further cuts to the Argentine crop.
• USDA reported net reductions of 23,000 MT for week ended March 2, a new marketing-year-low. Sales were down noticeably from the previous week and from the 4-week average. The expected pre-report range for the week was 200,000 to 750,000 MT.
• USDA reported a daily export sale of 184,000 MT for delivery to “unknown destinations” during the 2022-23 marketing year.
• The Rosario Grains Exchange slashed its Argentine soybean crop estimate by 7.5 MMT to 27 MT, suggesting the crop is the smallest produced since 1999 when production was 21.2 MMT. Warnings of further cuts were noted if temps don’t moderate, and late-season rains are missed.
• May soybeans have dropped below yesterday’s low and other levels of support. Initial resistance is at $15.30 1/2.
   

SRW and HRW wheat futures are 15 to 18 cents lower. Spring wheat is mostly 10 to 12 cents lower.

• Winter wheat futures are lower despite a weaker U.S. dollar and uncertainty around the extension of the Black Sea grain deal.
• World Weather Inc. states temperatures will trend cooler which could help temporarily slow winter wheat development in southeastern areas where soil temperatures are warmest; however, the unusually cold air will be brief with another warm-up expected in the middle portion of next week. 
• USDA reported weekly sales of 266,700 MT for week ended March 2, which was down 6% from the previous week, but up 11% from the 4-week average. Net sales were near the low end of the pre-report range of 150,000 to 500,000 MT.
• Ukraine’s grain harvest may fall 37% to 34 MMT in 2023 due to fewer planted acres and lower yields, according to the country’s national academy of agricultural sciences.
• May SRW wheat futures have traded as low as $6.69 1/4. Support lies at $6.66, while initial resistance is at $6.96 1/2.

Live cattle are slightly lower while feeders are mostly firmer.

• Live cattle are choppy as traders are waiting for the cash market to develop.
• Packers are drawing out cash cattle negotiations, though feedlots are current and in no hurry to move cattle at steady/weaker prices. Despite packers’ efforts, cash prices have risen for five consecutive weeks and are expected to firm again this week.
• Choice boxed beef prices dropped $3.15 on Wednesday to $284.78, which is down $5.42 from the recent peak of $290.20. Select rose 63 cents to $278.12, narrowing the Choice/Select spread to $6.66. The drop in Choice spurred solid retailer interest as packers moved 165 loads, including 121.3 loads of Choice cuts.
• USDA reported weekly beef sales of 5,600 MT for week ended March 2, which was a marketing year low, down 31% from the previous week and 57% below the 4-week average.
• April live cattle have carved an intraday low of $164.95, below the 20-day moving average. Initial support lies at $164.84, while initial resistance is at $165.99.

Hog futures are mixed at midmorning.

• April lean hogs are trading lower as the slow-climbing cash index is tempering buyer interest.
• The CME lean hog index is up another 20 cents to $79.29 as of March 7, and is $7.18 off the late-January low, but is nearly $20 below last year at this time. The slow climb higher is limiting buying in spring-and-summer-month hog futures.
• The pork cutout value firmed 64 cents to $87.66 on Wednesday, though movement slowed to 245 loads, indicating retailers are hesitant of prices in the upper-$80 range.
• USDA reported net pork sales of 21,000 MT for week ended March 2, which was down 29% from the previous week and 44% from the 4-week average.
• April lean hogs rose as high as $86.325, extending above the 40-day moving average of $85.64, before turning lower. Initial resistance stands at $86.54, while initial support lies at $84.59.