Market Snapshot | February 2, 2022

Old-crop corn futures are 6 to 8 cents lower at midmorning after fading from overnight gains.

• Corn futures erased overnight gains and turned lower on profit-taking.
• Ethanol production averaged 1.041 million barrels per day (bpd) during the weekend Jan. 28, up 6,000 bpd from the previous week. Production increased 11.2% versus the corresponding week last year. Ethanol stocks increased 1.379 million barrels to 25.854 million barrels, the highest since the week ended April 24, 2020.
• USDA late yesterday reported corn processed for ethanol in December at a higher-than-expected 485.8 million bu., up from 466.9 million bu. in November and up from 431.7 million bu. in December 2020. The numbers illustrated strong domestic ethanol demand that’s contributed to the corn market’s rally.
• StoneX projected Brazil's first corn crop for 2021-22 at 25.3 MMT, down 1.5 MMT from the broker’s previous forecast of 26.8 MMT.
• March corn futures overnight rose as high as 6.40 3/4 before dropping as low as $6.26 1/4.
• Initial support in March futures is seen at yesterday’s low and the 10-day moving average, both at $6.24 1/2. Initial resistance is seen at the contract high posted Monday at $6.42 1/2, with further resistance at $6.50.

Soy complex futures are higher and led by gains in the “teens” in nearby soybeans and $1 to $2 in nearby soymeal; soyoil is steady to up slightly.

• Soybean futures rose to contract highs for the fifth straight session on fresh export business and expectations a smaller South American crop will boost demand for U.S. beans.
• USDA reported sales of 380,000 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year. Today’s announcement follows USDA-reported soybean sales to China or unknown destinations the previous three business days totaling 525,000 MT for 2021-22 and 2022-23.
• StoneX lowered its estimate for Brazil's 2021-22 soybean crop by 7.5 MMT to 126.5 MMT, joining other private forecasters in cutting production expectations for the world’s top soybean exporter. Brazil produced 138 MMT last year.
• USDA late yesterday reported U.S. soybean crush at 198.2 million bu. in December, higher than trade expectations and a new monthly record.
• March soybeans overnight hit a contract high at $15.64, the highest intraday price for nearby futures since June 2021. Based on the daily continuation chart, upside targets for March soybeans include psychological resistance around $16.00, last June’s high at $16.23 1/2 and a nine-year high of $16.77 1/4, reached in May of last year.
• March soymeal posted a contract high at $447.60, the highest price for an intraday contract since May. March soyoil notched a contract high at 66.92 cents.

Wheat futures are mostly weaker, led lower by the winter wheat markets.

• Winter wheat futures erased overnight gains amid profit-taking following recent gains and prospects for moisture relief in the U.S. Plains. Ongoing concerns a Russian invasion of Ukraine may disrupt the global wheat trade remains a supportive factor.
• Beneficial snow will continue today and tomorrow in the Plains HRW belt with the exception of north-central Kansas and central Nebraska, where no snow is expected, World Weather said.
• The snow “will be enough to raise topsoil moisture some when it melts and will be enough to protect crops from subzero Fahrenheit temperatures” tomorrow and Friday, the forecaster said. “Some minor crop damage may occur in snow-free areas of Nebraska and northern Kansas” tomorrow morning.
• Ukraine has exported 38.6 MMT of grain so far in 2021-22, up 32% from the same period last year. That total included 17 MMT of wheat and 15.6 MMT of corn.
• Tunisia purchased about 100,000 MT of soft wheat and 75,000 MT each of durum and feed barley – all to be sourced from optional origins. 
• March SRW wheat reached $7.78 1/2 before dropping as low as $7.59. Initial support is seen at this week’s low of $7.56 3/4, with resistance at the 10-day moving average around $7.84.

Cattle futures are solidly firmly higher at midmorning, led by strong gains in feeders.

• Live cattle futures posted a contract high for the second day in a row on bullish technicals and signs of firmer cash prices, along with concern over a winter storm hitting the Plains feedlot region.
• A major winter storm dropped 1 to 4 inches of snow across much of the central U.S. Plains and near-zero or below-zero temperatures are expected the next two days. “Livestock stress will be widespread in central Texas, Oklahoma and a part of the southwestern Plains,” World Weather said.
• Light cash cattle trade was reported in the $137 to $139 range in the Southern Plains yesterday, $1 to $2 higher than last week. The volume was too light to be considered a true market test, but cash sources signal feedlots have no interest in moving cattle at lower prices.
• Choice cutout values dropped nearly $5.00 yesterday to $285.44.
• April live cattle futures reached a contract high at $146.475, while February futures hit $141.475, the highest intraday price for nearby futures since March 2016.
• March feeder cattle rose to $166.125, the highest intraday price since Jan. 20.

Lean hog futures are mostly higher and near contract highs.

• Aside from the lead February contract, lean hog futures are extending recent strength on firmer cash and signs meatpackers are returning to normal processing levels after Covid-related slowdowns last month.
• The CME lean hog index is up another 99 cents to $83.14, the highest since Oct. 21. February lean hog futures finished $5.01 above today’s cash quote.
• Pork cutout values fell 79 cents early today to an average of $93.72.
• April lean hogs rose as high as $99.075, slightly under the contract high of $99.15 posted yesterday. Deferred contracts also reached contract highs, with June futures hitting $108.75.