Market Snapshot | February 22, 2023

Corn futures are 2 to 4 cents lower midmorning.

• Corn futures are taking spillover weakness from crude oil and SRW wheat futures.
• World Weather Inc. says a restricted rainfall pattern across Argentina will occur through most of the next two weeks and stress to crops is likely to increase in many areas as the remaining soil moisture is lost to evaporation while fieldwork should advance well in much of the country.
• Safrinha corn planting in Brazil will remain sluggish due to delayed soybean harvesting from continued rainfall. World Weather notes planting will not come close to finishing before normal planting dates end, with much of the crop likely going into the ground later than normal.
• March corn is trading narrowly within the previous session’s range but has fallen below the 10- and 20-day moving averages. Initial support is at $6.76 1/4, while initial resistance is at $6.83 3/4.

Soybeans are 4 to 7 cents lower, while March meal futures are nearly $6.00 lower. March soyoil is around 30 points higher.

• Soybeans are seeing mild corrective selling, though strength in soyoil has pulled the market off the intraday lows.
• Paraguay and much of Brazil outside of some northeastern areas and a few far southern locations will see regular rounds of showers and thunderstorms through the next two weeks that will maintain favorable conditions for crop development while causing interruptions to fieldwork, according to World Weather Inc.
• Malaysian palm oil futures rose on Wednesday, tracking overnight strength in U.S. soyoil prices amid concerns over crop losses in drought-hit Argentina, though a reversal capped palm oil’s gains.
• March soybeans traded as high as $15.54 overnight, briefly trading above initial resistance at $15.53 1/2, before turning lower. Initial support is at $15.39 1/2.

SRW wheat futures are 13 to 16 cents lower, while HRW is mostly 19 to 25 cents lower. Spring wheat is 7 to 9 cents lower.

• Winter wheat futures are lower for the second straight session as an Egyptian tender highlighted export competition from the Black Sea region, softening global supply concerns.
• The lowest offer at an Egyptian state import tender today was for Russian wheat, while the only offer of non-Black Sea wheat, for French supplies, was the most expensive.
• Ukraine will ask Turkey and the United Nations this week to start talks to roll over the Black Sea grain deal, seeking an extension of at least on year that would include ports of Mykolaiv, according to a senior Ukrainian official.
• A significant snow event will continue in the southern half of the Northern Plains. World Weather notes soil moisture in much of this area is short to very short and moisture from the snow will be beneficial for improvement when it melts.
• Early signs of an El Nino weather pattern forming in the Pacific Ocean have raised expectations that Australian wheat output will fall back to normal levels, ending a period of record harvests.
• Scarred by high and volatile prices, global wheat buyers are reducing their purchases of future supplies, raising their exposure to potential price spikes that would end up being passed on to consumers already struggling with food inflation.
• March SRW wheat dipped as low as $7.33 – the lowest level since Jan. 24. Initial support lies at $7.23 1/2, while initial resistance stands at the 40-day moving average of $7.56.

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

• Live cattle are slightly higher as traders continue to wait for cash cattle trade to develop, though active trade may not occur until after USDA’s Cattle on Feed Report Friday afternoon.
• Wholesale beef prices continue to rise, with a $4.31 jump in Choice to $287.20, the highest level since Jan. 31, 2021. Select rose $2.79 to $270.84, taking the Choice/Select spread to $16.36.
• Climbing wholesale beef prices are keeping packer margins solidly in the black, giving them incentive to actively compete for a tightening supply of market-ready cattle.
• April live cattle are trading narrowly between initial resistance of $165.31 and initial support of $163.86.

Hog futures are sharply lower at midsession.

• April lean hog futures are giving back a portion of Tuesday’s gains in a corrective pullback.
• The big premium April futures holds to the cash index is adding pressure.
• The CME lean hog index is up another 35 cents to $76.76 as of Feb. 18, extending the series of recent price gains and is now $4.65 off its Jan. 23 low.
• Pork cutout value dipped $4.71 to $83.01, with a near $27.00 drop in primal bellies leading the charge lower.
• April lean hogs are trading within the previous session’s range but have fallen below the 40-day moving average. Initial support lies at $85.10, with initial resistance at $90.57.