Market Snapshot | May 25, 2023

Corn futures are fractionally to 3 cents higher at midmorning.

• Corn futures are firmer, though buyer interest is limited in new-crop contracts.
• The general marketplace remains on edge as the U.S. debt-limit situation pushes forward with no solution. House Republican leadership feels confident they can reach a deal with the White House to raise the debt limit and pare back federal spending.
• USDA reported corn net sales reductions of 75,200 MT for 2022-23, for week ended May 18, which were down 78% from the previous week and sharply below the four-week average. New-crop sales totaled 52,100 MT for the week. Traders expected sales of (500,000) to 400,000 MT for 2022-23 and 0 to 300,000 MT for 2023-24. Exports of 1.503 MMT rose 38% from the week prior and 20% from the four-week average.
• World Weather Inc. notes weather throughout the Midwest will continue drier than usual for another week and then scattered showers and thunderstorms are likely, though resulting rainfall may continue lighter than usual.
• July corn has reached as high as $5.92 1/2, below resistance at $5.93 1/4. Initial support is around $5.83 1/2.

Soybeans are mixed amid bull spreading. July meal futures are more than $2.00 lower. July soyoil is around 90 points higher.

• Old-crop soybeans are firmer, while new-crop are under mild pressure.
• USDA reported soybean sales of 115,000 MT in week ended May 18, which were up notably from the previous week, but still 26% below the four-week average. New-crop sales totaled 1,100 MT for the week. Traders expected sales of (500,000) to 400,000 MT for the 2022-23 and 0 to 300,000 MT for 2023-24. Exports during the week increased 38% from the previous week and 20% from the four-week average.
• Malaysia’s crude palm oil production could drop between 1 MMT to 3 MMT next year due to the El Niño weather pattern, according to the Malaysian Palm Oil Board.
• July soybeans are consolidating sideways between initial support of $13.24 1/4 and initial resistance of $13.36 1/4.

SRW wheat is mostly 6 to 7 cents higher, while HRW wheat is 9 to 14 cents higher. HRS wheat is mostly 9 to 10 cents higher.

• Wheat futures are higher amid corrective buying despite weak export data and a general risk-off tone in the marketplace as the U.S. government continues to negotiate extending the debt ceiling.
• USDA reported net old-crop wheat sales reductions of 45,100 MT in week ended May 18, and net sales of 245,100 MT for 2023-24. Traders expected sales within a range of (75,000) to 100,000 MT for 2022-23 and 200,000 to 500,000 MT for 2023-24.
• U.S. HRW wheat areas will get periodic showers and thunderstorms over the next week to 10 days with a little concern with crop quality in some of the wetter areas, according to World Weather.
• Dozens of ships are unable to reach Ukraine, days after a Black Sea grain deal was extended and the pace of shipments is unlikely to pick up because of slow inspections and other uncertainties, according to Reuters.
• July SRW wheat is trading within Wednesday’s range, with $5.97 1/2 serving as initial support. First resistance stands at $6.19 3/4.

Live cattle are mostly lower, while feeders sharply lower in most contracts.

• Live cattle are favoring the downside, with traders pausing following Wednesday’s strong close.
• Cash cattle trade began Wednesday with higher prices, with cash sources reporting trades as high as $182 live and $286 dressed in northern locations and around $171 in the Southern Plains. The northern market was sharply higher from last week, while prices were steady to $1 higher in the Southern Plains.
• Wholesale beef prices fell Wednesday with a $2.44 drop in Choice to $298.30, while Select firmed $2.51 to $283.79, narrowing the Choice/Select spread to $14.51. Movement improved to 133 loads.
• The Cold Storage Report showed frozen beef stocks at 448.0 million lbs. at the end of April, down 29.8 million lbs. (6.2%) from March, nearly double the five-year average decline of 15.1 million lbs. during the month.
• USDA reported net beef sales of 18,300 MT for 2023, a 5% increase from the previous week and 15% above the four-week average.
• June live cattle are trading narrowly within Wednesday’s range, with $167.18 serving as resistance, while support lies near $165.42.

Lean hogs are posting strong losses.

• Lean hogs are posting heavy losses, deeper into oversold territory, even as the cash index continues to rise.
• The CME lean hog index is up 58 cents to $80.67 as of May 23. June lean hog futures are trading at around a $3 discount to the index, an oddity as expiration will occur in three weeks.
• The pork cutout value fell $2.63 on Wednesday to $80.87, led by an over $11 drop in bellies. Though movement improved to 342.9 loads for the day. Packers are having to cut prices to attract enough demand to keep up with supplies.
• Pork stocks at 565.5 million lbs. increased 31.6 million lbs. (5.9%) from March compared with the five-year average rise of 16.9 million pounds.
• USDA reported net pork sales of 29,200 MT for 2023, which were down 8% from the previous week and 29% below the four-week average. China purchased only 600 MT of pork for the week and took delivery of 4,600 MT.
• June lean hogs gapped lower at the open and have fallen below support at $78.975 and $78.15, with $76.95 serving as the next area of support. First resistance stands at Wednesday’s close of $79.80.