Market Snapshot | April 18, 2023

Corn futures are mostly unchanged to a penny lower at midsession.   

• May corn is posting mild losses after reversing from overnight gains amid looming Black Sea tensions and global supply concerns.
• Crop consultant Dr. Michael Cordonnier lowered his Argentine corn estimate by 1 MMT to 35 MMT and indicated a neutral to lower bias going forward. Cordonnier left his Brazil estimate unchanged at 123 MMT and noted a neutral bias going forward.
• World Weather Inc. notes today’s forecast is wetter for the lower Midwest April 25-26 and planting should not advance as swiftly as what was advertised on Monday, but overall fieldwork should advance relatively well between rounds of precip.
• Flooding along the Red River Basin of the north will worsen this week, though the situation does not seem to be as bad as feared with limited precip over the next few weeks and cold temps slowing snowmelt.
• May corn has reached as high as $6.82 1/2, the highest level since Feb. 21, but is currently pivoting around Monday’s close of $6.76 1/2. Resistance will continue at $6.81 1/2, while initial support lies at $6.66 ¾.

Soybeans are mixed, but are posting notable new-crop gains, while May meal futures are over $5.50 lower. May soyoil is about 100 points higher.

• Overnight soybean strength has waned, though futures currently favor the upside slightly despite lower meal prices.
• The U.S. ag attaché in Argentina trimmed the soybean crop estimate to 23.9 MMT, below USDA’s official forecast of 27 MMT. The post expects Argentina to import a record 11 MMT of soybeans in 2022-23 and export only 18.75 MMT of soymeal and 3.65 MMT of soyoil during the marketing year.
• Crop Consultant Dr. Michael Cordonnier cut his Argentine soybean estimate 2 MMT to 24 MMT, noting a neutral to lower bias going forward. Cordonnier left his Brazil estimate unchanged at 153 MMT, stating “barring any unforeseen problems in Rio Grande do Sul, the Brazilian estimate could increase by an additional 1 MMT.”
• Malaysian palm oil futures rose more than 4% overnight, in step with strength in related edible oils amid threats to the Black Sea initiative, with a weaker Malaysian ringgit offering additional support. 
• May soybeans have traded as high as $15.31 1/2, the highest level since March 8, and above resistance at $15.24 1/4, though the contract is trading just above support at $15.10 3/4.

SRW wheat is mostly a penny lower, while HRW is around 9 cents lower. HRS wheat is 7 to 8 cents lower.

• SRW is trading slightly lower with pressure stemming from HRW wheat despite a decrease in winter wheat ratings and global supply concerns.
• USDA rated 27% of the U.S. winter wheat crop as “good” to “excellent” as of Sunday, unchanged from last week, though the “poor” to “very poor” rating increased two percentage points to 39%. When USDA’s weekly crop condition ratings are plugged in the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop fell another 3.2 points to 248.0.
• Russian Foreign Minister Sergei Lavrov will discuss the Ukraine Black Sea export deal with U.N. Secretary-Genera Antonio Guterres in a meeting in New York next week. 
• Inspections of ships moving grain from Ukraine have restarted, according to the RIA news agency, which cited Russia’s foreign ministry. However, a senior Ukrainian official told Reuters, “Nothing has been resolved. There are no inspections.”
• Romania could follow Poland, Hungary and Slovakia in banning Ukrainian grain imports, a further setback for Kyiv as it tries to unblock exports through eastern Europe and save the Black Sea grain deal.
• SovEcon has increased its Russian wheat production estimate from 85.3 million tonnes last month to 86.8 million tonnes. Russia’s export forecast also increased to 44.5 million tonnes, up from 44.1 million.
• May SRW has pushed above the 40-day moving average of $6.96 and resistance at $7.04, posting an overnight high of $7.07. However, a reversal lower has the contract hovering over support at $6.89 1/4.

Live cattle are marking slight losses, while feeders are mixed.

• Live cattle are modestly lower despite bullish fundamentals and steady gains in cash and wholesale prices.
• Cash cattle averaged $180.44 last week, a $7.34 rise from the previous week. Packers purchased 87,000 head last week, including 22,000 head “with time.” Typically, that would indicate that packers would back off cash bids the following week, but as feedlot current and carcass weights decline, there aren’t enough supplies to fill needs. Thus, the cash market will likely post another record high this week.
• Wholesale beef prices also surged higher, with a $4.46 jump in Choice to $305.98 and $5.45 rise in Select to $289.32, taking the Choice/Select spread to $16.66. Movement totaled 95 loads. Strong wholesale prices are allowing packers margins to remain in the black, encouraging them to continue to compete for cash cattle.
• June live cattle have reached an intraday high of $165.45, though resistance is serving at $165.40. Initial support lies at $164.05.

Lean hogs are down heavily at midmorning.

• Lean hogs are posting solid losses as technicals weaken along with the cash index.
• The CME lean hog index dropped another 11 cents today. May hog futures took the lead-month status at a $9.48 premium to today’s cash quote (as of April 14). Given solid premiums to the cash market, buyer interest will likely remain limited until the cash index signals a bottom.
• The pork cutout value dropped 64 cents on Monday to $77.61, led by over a $10 drop in hams. Movement totaled 248 loads.
• China imported 150,000 MT of pork in March, an 11.2% increase from last year. During the first three months, China imported 530,000 MT of pork, which was up 27.7% from the same period last year.
• June lean hogs have edged below support at $87.14 and $86.11, with additional support lying near $85.42. Initial resistance stands around $88.87.