Market Snapshot | July 21, 2023

Market Snapshot
Market Snapshot
(Pro Farmer)

Corn is mostly 6 to 7 cents lower midmorning.

  • Corn futures are facing profit-taking and taking spillover losses from SRW wheat futures despite persisting tensions in Ukraine.
  • A few more days of mild temps and mostly favorable conditions for crop development will occur before temps become warm to hot next week while rain will be infrequent and too light during the next two weeks to keep much of the Corn Belt from seeing significant declines in soil moisture, notes World Weather Inc.
  • Russian Deputy Foreign Minister Sergei Vershinin stated earlier today that Moscow was ready to explore options on grain exports, but that there were no current talks on an alternative to the Black Sea grain deal.
  • December corn has dropped through support at the 100- and 40-day moving averages of $5.43 1/4 and $5.37 1/4, with additional support at $5.29 1/2. Resistance serves at $5.50 1/2.

Soybeans are 3 cents lower to 3 cents higher, while August meal futures are around $2.50 higher. Soyoil is around 120 points higher.

  • Soybeans are attempting to reverse earlier losses amid persisting strength in soyoil futures and increasing gains in meal futures.
  • World Weather states rain and cooler temps will be needed in early August to prevent yields from quickly declining in many areas, with soybeans to see significant production cuts if warm to hot temps and restricted rain persist through the first week of August.
  • Argentina’s government is expected to announce a new preferential exchange for agricultural products aiming to increase the country’s central bank reserves by $2 billion. It is not clear which products will be eligible for the scheme nor the exchange rate it will set.
  • November soybeans gapped lower at the open and has tested support at $13.96 and $13.87 1/4, while the 10-day moving average of $13.76 1/4 serves as additional support. Resistance is serving at $14.07 1/4.

Winter wheat futures are around 18 to 24 cents lower while HRS contracts are mostly 15 to 16 cents lower.

  • Wheat futures are encountering profit-taking following strong gains earlier in the week. A firmer U.S. dollar is also pressuring prices.
  • Russia attacked Ukrainian grain export facilities for a fourth day in a row overnight and practiced seizing ships in the Black Sea in an escalation of what Western leaders say is an attempt to wriggle out of sanctions by threatening a global food crisis.
  • Limited rainfall and above-average temps are expected in HRW wheat regions after this weekend, which will lead to a rapid decline in topsoil moisture. However, subsoil moisture will continue to be favorable and support crops for a while.
  • September SRW wheat has dropped below initial support of $7.08 1/2, with additional support lying at $6.90 1/4. Resistance stands at $7.29 1/2.

Live cattle are lower, while feeders are mixed.

  • Live cattle are posting mild losses as traders await USDA’s Cattle on Feed and Cattle Inventory Reports as well as the development of cash trade.
  • Cash trade has been pushed into the end of the week, but early trading indicates an increase from last week’s average.
  • Wholesale beef extended lower on Thursday, with Choice dropping $1.03 to $302.56, while Select fell $1.25 to $274.71, though movement increased to 152 loads.
  • USDA’s Cattle on Feed Report is expected to show a 2.4% decline in feedlot inventories from year-ago July 1. June placements are expected to fall 2.9% while marketings are expected to have dropped 4.8% form year-ago levels.
  • USDA’s Cattle Inventory Report is expected to show the U.S. cattle herd 2.3% smaller than last year as of July 1, with all other categories also expected to come in well under year-ago levels.
  • August live cattle are trading within Thursday’s range, with the 10-day moving average of $179.30 providing solid support. Resistance continues to serve at $182.425.

Lean hogs are mixed at midsession.

  • August lean hogs are edging slightly higher as persisting strength in cash fundamentals and wholesale prices prop up the contract.
  • The CME lean hog index rose 30 cents, which is the smallest gain since June 1. This year’s seasonal rally has extended further into the year than historical norms. Cash fundamentals remain in place for the rally to continue, namely wholesale prices to a fresh eleven-month high.
  • The pork cutout vale jumped $2.49 on Thursday to $115.10, with gains in all cuts except loins. Movement totaled 208.96 loads for the day.
  • August lean hogs are trading within Thursday’s range, with yesterday’s high of $101.85 serving as resistance, while support lies at $100.325.
 

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