Market Snapshot | February 22, 2022

Nearby corn futures are 8 to 10 cents higher at midmorning but down from overnight highs.

• Corn futures trimmed gains after climbing overnight to seven-month highs, joining rallying soybeans and wheat amid concerns a Russia/Ukraine conflict will disrupt the global grain trade.
• The market will continue to watch Russia/Ukraine closely, but corn likely requires strength in soybeans and wheat to extend upside.
• Crop Consultant Michael Cordonnier cut his Argentine corn crop estimate by 1 MMT to 49 MMT after a week of generally dry conditions across most of the country. He left his Brazilian corn estimate unchanged at 112 MMT.
• Crop conditions should improve the next two weeks in the driest areas in Paraguay and Brazil’s Mato Grosso do Sul, as well as southern Brazil, where showers and thunderstorms will occur regularly, World Weather Inc. said. South America still faces substantial crop losses due to extended drought.
• USDA reported 1.578 MMT (62.1 million bu.) of corn inspected for export during the week ended Feb. 17, up from 1.456 MMT the previous week. Expectations ranged from 1 MMT to 1.75 MMT.
• March corn futures overnight reached $6.71 3/4, a contract high and the highest price for a nearby futures since July. A strong close would have bulls targeting the psychologically important $7.00 level. Initial support is seen at the 10-day moving average around $6.48 and last week’s low at $6.35 1/2.

Soy complex futures are higher, with nearby soybeans up 18 to 20 cents, nearby soymeal up over $3 and nearby soyoil up around 140 points.

• Nearby soybean futures rose near nine-month highs on Russia/Ukraine concerns, along with fresh export business and expectations for crop shortfalls in South America.
• 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 3.65 MMT of soybean sales to China or “unknown destinations.”
• Also today, USDA reported 975,102 MT (35.8 million bu.) of soybeans inspected for export during the week ended Feb. 17, down from 1.16 MMT the previous week. Expectations ranged from 900,000 MT to 1.25 MMT.
• Cordonnier cut his Argentine soybean crop estimate by 1 MMT to 39 MMT and left his Brazilian estimate unchanged at 124 MMT. Cordonnier also left his Paraguay soybean crop peg at 5 MMT.
• Argentina's 2021-22 soybean and corn crops could see yields continue to decline in the weeks ahead with abundant rains only expected to arrive in mid-March to relieve a lengthy period of dry weather, the Buenos Aires Grain Exchange said yesterday.
• Large speculators increased their bullish bets in the soybean market for the fourth straight week, according to the CFTC’s Commitments of Traders report. The managed money net long in soybean futures and options increased 11,827 contracts to 175,372 contracts for the week ended Feb. 15, the highest since the week ended May 11.
• March soybean futures overnight reached $16.32, the highest since the contract high of $16.33 posted Feb. 10, while nearby soyoil hit the highest level since early June. November soybeans posted a contract high at $14.83.

Wheat futures are higher, led by gains of 15 to 17 cents in HRW contracts.

• HRW futures neared a two-month high and SRW wheat futures rose to the highest levels in a month, though both markets have pulled back from overnight rallies.
• Ukraine has exported 42.5 MMT of grain so far in 2021-22, up 37% from the same stage last season, including 17.85 MMT of wheat and 18.68 MMT of corn, agriculture ministry data showed.
• China sold 509,089 MT of the 525,704 MT of state-owned wheat reserves put up for auction last week at an average price of 2,698 yuan ($426) per MT. Interest in the state wheat reserves remains high and the average price increased from 2,590 yuan ($409) per MT the previous week.
• Managed money’s net short in SRW wheat increased 5,106 contracts during the week ended Feb. 15 to 34,658 futures and options contracts, the largest since July 2020, according to CFTC data.
• USDA reported a daily sale of 120,000 MT of HRW wheat for delivery to Nigeria, divided evenly between 2021-22 and 2022-23 marketing years.
• USDA reported 539,366 MT (19.8 million bu.) of wheat inspected for export during the week ended Feb. 17, up from 459,377 MT the previous week. Expectations ranged from 200,000 to 475,000 MT.
• March SRW wheat rose as high as $8.24 1/4, the highest since $8.31 1/2 on Jan. 25. March HRW rose as high as $8.65, the highest since late December.

Cattle futures are mostly lower at midmorning, led by declines in feeder cattle.

• Live cattle futures extended last week’s declines amid slumping wholesale beef and beliefs the market has established a near-term top, despite strong cash fundamentals.
• The USDA-reported live steer average rose $1.88 last week to an average of $142.36, the third consecutive weekly gain. Traders are expecting firmer cash cattle trade again this week.
• USDA will release its monthly Cold Storage Report after today’s close. The report will detail meat stocks held in frozen storage as of Jan. 31. The five-year average is a 2-million-lb. decline in beef stocks and a 56.7-million-lb. build in pork inventories during January. 
• April live cattle fell as low as $146.975, slightly above support around the 20-day moving average of $145.45 and last week’s low at $145.275.

Lean hog futures are higher, posting contract highs.

• Hog futures rose for a sixth consecutive day, with most-active April reaching a contract high for the third straight day on continued strength in cash fundamentals.
• CME lean hog index rose $1.89 to $97.12, the highest since Sept. 10. Wholesale pork tumbled to end last week but remains up sharply from the January lows.
• Pork cutout values fell $6.63 Friday to an average of $109.91, down 5 cents from the end of the previous week. Movement was light at about 206 loads.
• April lean hogs reached a contract high at $111.25 and have rallied over $8 the past week, pushing the market well-into oversold conditions and raising prospects for a corrective sell-off.