Market Snapshot | February 2, 2023

Corn futures are 4 to 5 cents lower in old-crop contracts, with new-crop unchanged to a penny lower.

Corn futures are lower despite signs of improving exports as outside markets prove unsupportive.
USDA reported weekly corn export sales of 1.593 MMT for 2022-23, which was up 75% from the previous week and up noticeably from the 4-week average. Net sales exceeded expectations ranging from 600,000 MT to 1.2 MMT.
World Weather Inc. notes that Argentina’s bottom line is still one of great concern for all crops in northeastern portions of the nation, where little to no rain is expected for 10 days to two weeks and the ground is already critically dry.
Brazil’s corn exports reached nearly 6.4 MMT in January, up sharply from year-ago and above the previous record of 4.4 MMT shipped in January.
March corn traded as high as $6.86, breaching initial resistance near $6.84 1/2 before retreating below initial support at the 10-day moving average of $6.77 3/4. Additional resistance and support stands at $6.87 3/4 and $6.75, respectively.

Soybeans are 7 to 9 cents higher. March meal futures are nearly $5.00 higher and March soyoil is modestly lower.

Soybeans are regaining a portion of yesterday’s losses as Argentine weather woes persist.
Brazil’s bottom line is a little better than it has been with just enough improvement in Mato Grasso and southeastern areas for some improved harvest progress into the weekend, though next week will trend wetter according to World Weather.
China’s import and exports are facing an extremely severe environment due to the surging risks of global recession and slowing external demand, according to a commerce ministry official.
USDA reported 736,000 MT of soybean sales for week ended Jan. 26, which was down 36% from the previous week and 18% from the 4-week average. Net sales were at the low end of expectations ranging from 700,000 MT to 1.3 MMT.
March soybeans are trading narrowly, within the previous session’s range and made a high just below initial resistance near $15.83 1/2. First support lies at the 10-day moving average of $15.15 1/2.

SRW wheat futures are mostly 3 to 4 cents lower, while HRW is 7 to 8 cents lower. HRS futures are 2 to 5 cents lower.

SRW wheat futures turned lower after trading mostly higher overnight as the U.S. dollar trades modestly higher.
Wheat export sales for week ended Jan. 26 totaled 136,400 MT, which were down 73% from the previous week and 51% from the previous four-week average. The week’s sales missed the expected range of 300,000 to 600,000 MT.
Weather conditions for winter crops in both Ukraine and Russia are looking mostly favorable, but potential risks must be monitored, with some early concerns starting to appear in Russia.
March SRW is trading within the previous session’s range, marking a high at $7.70 3/4 for the second straight day. Initial resistance stands at $7.66 1/2, with support at the 40-day moving average near $7.51 1/2.

Live cattle are posting moderate gains, while feeders are sharply higher.

Live and feeder cattle futures are higher, as traders likely view yesterday’s selloff as a buying opportunity as long-term fundamentals remain bullish.
Cash cattle trade has been slow to develop again this week, with packer bids limited as they drag their feet in hopes of getting cattle bought at lower prices on Friday. Feedlots are seemingly in no hurry to move any more animals than necessary unless packers raise bids, suggesting trading volume could be light again this week.
Wholesale prices fell Wednesday, with a $1.02 drop in Choice and 14 cent decline in Select, with the spread narrowing to $12.29.
USDA reported weekly beef sales of 25,200 MT for 2023, primarily to South Korea and Japan.
April live cattle narrowly trading within the previous session’s range, with initial support lying near $161.72 and first resistance standing around $163.02.

Hog futures are being led higher by strong gains in the February contract.

February lean hog futures are notably higher on corrective buying after a sharp selloff in the previous session.
After a four-day gain, the CME lean hog index has posted two days of declines, falling 7 cents to $72.51 (as of Jan. 31).
February lean hog futures extended their premium to the cash index to around $2.75. April hogs are now nearly $13.00 above the cash index.
Pork cutout fell $1.30 yesterday to $78.95, with a drop in all cuts, except loins. Loads remained solid at 315.76.
USDA reported weekly export sales of 30,900 MT for 2023, primarily for Mexico and Japan.
April lean hogs are trading within yesterday’s range and the broader consolidation range of the past two weeks.

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