Market Snapshot | February 7, 2023

Corn futures are 2 to 4 cents lower at midmorning.

Corn futures are trading sideways to lower ahead of USDA’s supply and demand updates Wednesday.
Traders expect minor adjustments to USDA’s U.S. balance sheets in tomorrow’s Supply & Demand Report. U.S. ending stocks are expected at 1.266 billion bu., up from 1.242 billion bu. in January.
South American crop consultant, Dr. Michael Cordonnier left his Argentine corn crop forecast at 44 MMT but warned, “any extended period of hot and dry weather going forward would result in a lower corn estimate.” Cordonnnier left his Brazilian corn crop estimate at 125 MMT.
If U.S. GMO corn passes the sanitary filters of the Federal Commission for Protection against sanitary risks (Cofepris), it will have no problem entering Mexico, according to Mexico’s Secretary of Economy, Raquel Buenrostro. A new decree is reportedly coming soon.
March corn remains rangebound between initial support at the 100-day moving average of $6.74 and initial resistance at the 10-day moving average of $6.79.

Soybeans are mostly 4 to 6 cents lower. March meal futures are around $8.00 lower, while March soyoil is up more than 100 points.

Soybeans are being led lower by meal futures ahead of tomorrow’s supply and demand updates.
Traders expect a mild 1-million-bu. increase in soybean ending stocks to 211 million bushels. Traders have a greater focus on global production, namely changes to Argentine production.
Cordonnier cut his Argentina soybean crop forecast by 1 MMT to 38 MMT, noting “the estimate could easily move lower with an extended period of hot and dry weather.” Cordonnier kept his Brazilian soybean crop estimate at 151 MMT.
World Weather predicts two rounds of important rains will occur Saturday into Monday in Argentina, as well as Feb. 14-16, with the period being closely monitored as a larger part of the country should be dry enough by then that crop stress could quickly increase if these rain events falter.
March soybeans have dipped below the 10- and 20-day moving averages and support at $15.13 1/2. Further support lies at $15.05 3/4. Initial resistance is at $15.32 1/4.

SRW wheat futures are mostly a penny to 2 cents higher, while HRW is 3 to 7 cents higher. HRS futures are narrowly mixed.

Winter wheat futures are mildly higher, as the U.S. dollar loses steam and crude oil continues to rebound from Monday’s low.
Traders are expecting an increase in U.S. ending stocks on Wednesday, to 576 million bu., up from 567 million bu. in January.
Statistics Canada reported Canadian wheat stocks as of Dec. 31 at 22.3 MMT, which was in line with pre-report estimates and reflects a 32.6% increase from year-ago.
World Weather Inc. warns of a potential sudden stratospheric warming event that should begin to evolve a week from now, becoming notable in the last days of February and especially in March. The forecaster notes cooler-than-usual temps will accompany the event from the central Canada Prairies into the heart of the Great Plains and a part of the Midwest.
March SRW is trading within a narrow range, with initial support at the 20-day moving average of $7.45 3/4. Initial resistance remains at $7.62 1/2.

Live cattle are mixed, with nearby contracts marking mild gains. Feeder cattle are firmer.

Live cattle are choppy, with the April contract reaching new contract highs and most deferred contracts trading slightly lower.
The average cash cattle price rose $2.92 to $158.17 last week – the highest price since the end of May 2015. What’s more, packers purchased only 64,000 head of cattle and just 50,000 head in the five-state area, leaving packers short-bought on near-term slaughter needs.
Wholesale beef prices swelled on Monday, with Choice up $1.83 and Select $2.11 higher, on movement of 104 loads.
April live cattle have traded as high as $161.15, with resistance near $161.44. Initial support lies near $160.38.

Hog futures are mixed at midsession.

Nearby lean hog futures are firmer amid increased signs the cash market is working on seasonal bottom. Far-deferred contracts are under mild pressure.
The CME lean hog index is 24 cents higher to $73.29 (as of Feb. 3), marking the seventh gain in the past nine days.
Pork cutout value rose $2.53 on Monday, with an increase in all cuts but was led by an $8 jump in bellies.
April lean hogs have traded as low as $81.275, holding just above initial support near $81.28, additional support lies around $79.84. Initial resistance is near the 10-day moving average near $85.38.

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