Market Snapshot | February 16, 2022

Nearby corn futures are around 8 cents higher at midmorning.

• Corn futures climbed on spillover from rallying soybeans and ongoing expectations for reduced South American production. Stronger crude oil prices are also supportive.
• Argentina’s southern summer crop areas have received ample rain and moisture is expected to remain “good” through the end of this month, World Weather Inc. said today. “Crop moisture in other parts of the nation is either very short or marginally adequate to short and dwindling.”
• U.S. ethanol production increased 15,000 barrels per day (bpd) to an average of 1.009 million bpd during the week ended Feb. 11, up 11% from the same week last year. Ethanol stocks rose 684,000 barrels to 25.48 million barrels.
• March corn futures held support overnight above yesterday’s low of $6.35 1/2 before rising as high as $6.47. Bulls are trying to regain upside momentum after March corn posted a contract high at $6.62 3/4 Feb. 10.
• Initial support includes yesterday’s low and the February low of $6.10 1/4.

Soy complex futures are broadly higher, with nearby soybeans up 25 to 26 cents, nearby soymeal up over $10 and nearby soyoil up more than 70 points.

• Soybean futures extended overnight gains on reduced South American crop outlook and fresh export business. Concern over Southern America’s shrinking crop prospects has stirred increased demand from top buyers such as China.
• USDA reported a daily sale of 132,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Since Jan. 28, USDA has reported a combined 3.2 MMT of soybean sales to China or “unknown destinations.”
• Paraguay’s crushing industry will run out of soybeans to process by the middle of the year due to a drought, the country’s soy crushers association told Reuters. The Paraguayan Chamber of Oilseed and Cereal Processors, which represents major commodity companies such as ADM, Bunge and Cargill, has petitioned the government to approve a tax exemption to enable soybean imports for crushing.

Winter wheat futures are slightly higher while spring wheat is mostly lower.

• Winter wheat futures are gaining support from a rally in soybeans but strength has been limited by apparent easing of Russia/Ukraine tensions.
• Jordan tendered to buy 120,000 MT of optional origin milling wheat. Iran tendered to buy 60,000 MT each of corn, soymeal and feed barley from unspecified origins. Japan received no offers in its tender for 80,000 MT of feed wheat and 100,000 MT of feed barley. Syria made no purchase in its tender to buy 200,000 MT of milling wheat.
• Winter wheat futures are trading in narrow ranges amid lack of fresh news. March SRW futures rose as high as $7.86 3/4 after holding above yesterday’s low at $7.73. SRW bulls’ upside objectives include closing March futures above solid resistance at the January high of $8.31 1/2.

Cattle futures are mostly firmer at mid-morning, led by live cattle.

• Live cattle futures extended yesterday’s gains on expectations for continued cash market strength.
• Packers have not yet established initial bids, suggesting cash trade will be pushed until the latter part of the week, though cash sources expect steady to slightly firmer prices.
• Cash sources indicate feedlots are asking $142 to $143 for this week’s showlist supplies in the Southern Plains, while the northern market was quiet Tuesday. Some initial trade at $142 in the Southern Plains is being reported this morning.
• Slumping wholesale beef is limited buying interest in futures. Meatpackers have been cutting prices to move product. Choice cutout values fell $3.59 yesterday to an average of $270.37, the lowest since Jan. 6, though movement was stronger at 165 loads.

Lean hog futures are firmly higher, led by nearby contracts.

• Hog futures rose for a third consecutive day behind cash market strength, though weakness in wholesale pork suggests a short-term top may be forming. The market is also oversold and vulnerable to further correction.
• Today’s CME lean hog index is up another $1.33 to $91.84, the highest since early October.
• But pork cutout values fell $1.26 yesterday to $106.72, still near a fourth-month high hit Feb. 11. Movement totaled 325 loads.
• April lean hog futures rose as high as $106.525, a high for the week. Key upside targets include the contract high of $107.70 posted Feb. 10. Support is seen at yesterday’s low of $101.00.