Market Snapshot | August 1, 2022

Corn futures are down around 20 cents at midmorning.

• Corn futures fell for the first session in six as the departure of the first grain ship from a Ukrainian port under a new agreement raised global supply prospects. Prospects for less threatening Midwest weather also weighed on prices.
• The first ship to depart the port of Odesa under a recent deal will pass through the Bosphorus Tuesday, carrying 26,000 MT Ukrainian corn to Lebanon, Ukrainian Infrastructure Minister Oleksandr Kubrakov said. Ukraine expects to reach full throughput capacity for transporting agricultural goods within weeks.
• A high-pressure ridge will bring hot and dry conditions to the Plains and Midwest this week before retreating over the Rocky Mountains after the weekend. But this week’s outlook isn’t as harsh as what forecast models predicted last Friday.
• USDA reported 856,938 MT (33.7 million bu.) of corn inspected for export during the week ended July 28, up from 753,793 MT a week earlier and around the middle trade expectations.
• USDA will update weekly crop condition ratings after the close. A week ago, USDA reported 61% of the U.S. corn crop in either “good” or “excellent” condition as of July 24, down from 64% the previous week.
• USDA is expected to report corn-for-ethanol use in June totaling 449.9 million bu., which would be up 3.8 million bu. (0.9%) from May and 2.3% above year-ago.
• Taiwan tendered to buy up to 65,000 MT of corn to be sourced from the U.S., Brazil, Argentina or South Africa.
• December corn futures fell as low as $5.97 1/4, a few cents above the 10-day moving average, after gaining 55 3/4 cents last week to $6.20.

Soy complex futures are broadly lower, with soybeans down nearly 70 cents, soymeal down more than $15 and soyoil down more than 200 points.

• The soy complex is posting steep losses on profit-taking and corrective selling following last week’s rally and easing concerns over Midwest weather.
• Traders will monitor USDA’s crop ratings after the close today. A week ago, USDA reported 59% of the U.S. soybean crop in “good” to “excellent” condition, down from 61% the previous week and the sixth straight weekly decline.
• USDA reported 555,083 MT (20.4 million bu.) of soybeans inspected for export during the week ended July 28, up from 392,480 MT the previous week and around the middle of trade expectations.
• USDA is expected to report June soybean crush totaled 174.6 million bu., according to a Bloomberg survey, which would be down 6.3 million bu. (3.5%) from May but up 7.9% from last year.
• Indonesia will retain its domestic sales requirement for palm oil to keep local cooking oil prices affordable, but the government will allow exporters to ship nine times the amount sold locally under the rule, up from seven times previously.
• Strategie Grains lowered its forecast for this year’s European Union sunflower seed crop to 10.35 MMT from 10.87 MMT a month ago, citing impacts of drought. At that level, production would be equal to last year.
• November soybeans dropped under the 40-day moving average at $14.34 and fell as low as $13.96 1/2, after rallying nearly $1.53 last week.

Wheat futures are down sharply, led by declines of 24 to 28 cents in HRW and SRW contracts.

• Wheat futures fell in sympathy with sharp declines in corn and soybeans after the resumption of grain shipments from Ukrainian ports.
• USDA reported 256,601 MT (9.4 million bu.) of wheat inspected for export during the week ended July 28, down from 475,526 MT the previous week and at the low end of trade expectations.
• Recent rains in several regions of Russia have hurt the quality of winter wheat but improved yield prospects for spring wheat, SovEcon ag consultancy said. “There was too much rain for winter wheat at this stage which hits the quality – as farmers typically say, ‘gluten and protein have been washed away.’ However, it is improving the set-up for spring crops, including spring wheat,” SovEcon said in a note.
• Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat.
• September SRW futures fell as low as $7.82 after gaining 48 3/4 cents last week.

Live cattle are mixed at midmorning while feeder cattle are firmer.

• Nearby live cattle are under mild pressure from expectations for further weakness in the cash market this week.
• With a new month underway, packers have access to a fresh batch of contracted cattle, which may lead to another week of limited packer demand in the negotiated market. USDA-reported live steers averaged $139.07 last week through Friday morning, down from last week’s average of $141.12.
• Signs of decent beef demand may limit futures declines. Choice beef cutout values ended last week at $269.24, up $2.12 from the previous week.
• Feeder cattle are supported by the sharp losses in the corn market.

Hog futures are lower, led by the October contract.

• Hog futures are under profit-taking pressure following strong gains last week. Continued cash market strength likely will limit selling interest.
• The CME lean hog index is up another 84 cents to $121.42 (as of July 28), just $1.26 below last year’s mid-June peak. Traders may continue to narrow the bigger-than-normal seasonal cash decline built into fall- and winter-month hog futures.
• Pork demand appears to be holding relatively well and retailers likely will step up buying soon for Labor Day weekend features. Pork cutout values ended Friday at $127.34, up $1.60 for the week.
• August hogs dropped as low as $119.35, though that was within last Friday’s range. The downside is limited by the lead contract’s discount to the rising cash index.