Market Snapshot | May 16, 2023

Corn futures are 10 to 11 cents lower at midmorning.

• Corn futures are under pressure due to broad risk-off sentiments amid economic concerns and the political deadlock over the U.S. government borrowing limit.
• Exports of Ukrainian corn are expected to fall nearly 30% to 19 MMT next season, with the ongoing war setting up the country for a much smaller crop this year, according to the Ukrainian Grain Association.
• Crop consultant, Dr. Michael Cordonnier increased his Brazilian corn production estimate by 1 MMT to 125 MMT, mainly because the safrinha corn crop is one week closer to the end without having suffered a frost. Cordonnier left his Argentine corn estimate unchanged at 35 MMT.
• July corn is leaning on support at Monday’s low of $5.81 1/2, with additional support at $5.72 3/4. The 20-day moving average of $5.95 3/4 is serving as resistance.

Soybeans are 25 to 35 cents lower, while July meal futures are around $4.00 lower. July soyoil is about 200 points lower.

• The soy complex is being weighed down by the strong planting pace and echoes of a record Brazilian crop.
• Crop Consultant, Dr. Michael Cordonnier increased the 2022-23 soybean estimate by 1 MMT to 155 MMT, stating yields are strong with harvest nearly complete with few soybeans left to harvest in Rio Grande do Sul. Cordonnier left his Argentine soybean estimate unchanged at 23 MMT.
• Malaysian palm oil futures slipped on Tuesday for the second straight session, with fears of rising production, and tracking losses in rival edible oils casting a shadow over prices.
• July soybeans fell to the lowest level since early August 2022, with $13.62 1/4 serving as support. Resistance stands at $13.99 1/2.

SRW is 16 to 18 cents lower, while HRW wheat is 9 to 12 cents lower. HRS wheat is 5 to 7 cents lower.

• Wheat futures are facing selling pressure following two straight days of solid gains. Outside markets and increased winter wheat ratings are weighing on the complex.
• USDA rated 29% of the winter wheat crop as “good” to “excellent” as of Sunday, unchanged from the previous week. The crop rated “poor” to “very poor” fell 3 points to 41%. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 5.6 points to a still historically low rating of 242.6. The SRW crop rose 0.6 points to 376.5.
• Scouts on the Wheat Quality Council’s annual HRW tour are sampling fields today in central and northern Kansas, along with remote areas of far southern Nebraska.
• Prospects for extending the Black Sea grain deal are not encouraging at the moment, Russian RIA news agency reported, citing a Russian source familiar with the situation. Though the Kremlin says communications on the situation are ongoing ahead of the May 18 deadline for the current deal.
• July SRW wheat fell back below the 10- and 20-day moving averages, with $6.40 3/4 providing initial support. Initial resistance stands near $6.72 1/4.

Live cattle are lower while feeders are mostly firmer.

• Live cattle are posting losses as traders cautiously wait for the cash market to develop.
• Cash cattle unexpectedly rose 20 cents last week to an average price of $174.13. Traders are comfortable with futures trading well below that level.
• Choice boxed beef fell another $2.63 on Monday to $301.98 while Select rose 3 cents to $284.71, narrowing the Choice/Select spread to $17.27. Movement was light at 91 loads. Retailer buying remains erratic ahead of Memorial Day week, which unofficially kicks off the grilling season.
• June live cattle are trading narrowly within Monday’s range, with initial resistance remaining at $164.84 and support at the 20-day moving average of $163.72.

Lean hogs are mixed at midsession, with nearby contracts favoring the upside.

• Hog futures are mixed despite solid gains on Monday, as buyer interest seems limited amid a wide risk-off tone.
• The CME lean hog index is up another 59 cents to $76.50 as of May 12.
• The pork cutout value rose 97 cents on Monday to $84.38, while movement totaled 306.7 loads. The Choice beef/pork cutout ratio has fallen from recent highs but remains historically wide at nearly 3.6.
• June lean hogs are pivoting mostly around the 20-day moving average of $86.79, while initial resistance stands near $87.46 and initial support lies at $85.64.