Market Snapshot | February 8, 2023

Corn futures are mostly 1 to 2 cents higher at midmorning.

Corn futures are slightly higher, taking mild support from strength in crude oil and soybeans as traders await USDA’s supply and demand updates. Traders expect U.S. ending stocks to rise to 1.266 billion bu., up 24 million bu. from last month.
Brazilian farmers are expected to produce a smaller second corn crop because of soy harvesting delays that may force them to sow safrinha corn outside the ideal climate window, according to Conab. The agency projects Brazil’s second corn crop at 94.9 MMT, down from 96.2 MMT in January. Total corn production is forecast at 123.7 MMT, down 1.3 MMT from last month.
The Rosario Grain Exchange reduced its Argentines corn crop forecast to 42.5 MMT versus 45 MMT previously estimated.
Anec forecasts Brazilian corn exports will reach 2.292 MMT in February, compared to 523,342 MT in the same month a year ago.
Weekly ethanol grind for week ended Feb. 3 dropped 28,000 barrels per day (bpd) to an average of 1 million bpd, which was up 0.6% from the corresponding week last year. Ethanol stocks declined 25,000 barrels to 24.417 million barrels.
March corn is trading narrowly with resistance at the 20-day moving average of $6.76 1/2 and initial support near $6.72 1/4.

Soybeans are mostly 3 to 5 cents higher. March meal futures are near unchanged, and March soyoil is around 60 points lower.

Soybeans are trading a narrow range as traders square positions before USDA’s supply/demand and global production updates, with Argentine production expected to be a wild card.
Traders expect USDA to raise U.S. ending stocks 1 million bu. from last month to 211 million bushels. Much focus in this morning’s reports will be on South American production, especially the Argentine crop with private forecasts continuing to decline.
The Rosario Grain Exchange trimmed Argentina’s estimated soybean crop to 34.5 MMT, down from 37 MMT previously, amid a historic drought.
Conab raised its Brazilian soybean crop estimate by 177,000 MT from last month to a record 152.9 MMT. The soybean export forecast was maintained at 93.9 MMT.
Brazilian soy exports are expected to reach between 7.6 MMT and 9.6 MMT in February, versus 9.113 MMT in the same month a year ago, according to Anec.
China’s agriculture ministry raised ins 2022-23 edible oil consumption outlook slightly, citing stronger migration to cities than previously expected. The ministry made no changes to its 2022-23 supply or usage forecasts for corn, soybeans or cotton this month.
Malaysian palm oil futures rose on Wednesday to a one-month closing high, as investors awaited key monthly data amid concerns of tightening supply from top producer Indonesia.
March soybeans are trading in a sideways, consolidated pattern between initial resistance at $15.26 3/4 and initial support at $15.07 1/4.

SRW wheat futures are marking 5- to 8-cent gains, while HRW is mixed and HRS is mostly 4 to 5 cents higher.

Winter wheat futures are higher on supply concerns of high protein wheat following fresh forecasts of dry weather in key growing areas in the U.S. Plains.
Traders expect USDA to raise U.S. wheat ending stocks 9 million bu. from last month to 576 million bushels.
Russia said on Wednesday that work to unblock Russian exports under the Black Sea grain deal was unsatisfactory, accusing the European Union of failing to deliver on its promises.
Ten Turkish cities heavily affected by recent earthquakes are known as key locations for milling and flour production. The CFO of the International Associations of Operative Millers states there are around 128 flour mills out of a total of 535 (around 24% of total capacity) are in the region.
India is considering extending a ban on wheat exports, as the world’s second-largest producer seeks to restore state reserves and bring down domestic prices. If the extension is approved, wheat exports from the country may not resume until mid-2024.
Western U.S. hard red winter wheat areas will continue lacking precipitation of significance through the weekend, though there is potential for rain in the southwestern Plains Monday and in the remainder of the west during mid-week next week, though World Weather Inc. states confidence is low.
March SRW futures are trading within the previous session’s range but have traded above the 20- and 10-day moving averages of $7.49 1/2 and $7.50, respectively. Initial support lies near $7.43 1/2.

Live cattle are higher with the nearby contract posting larger gains, while feeders are narrowly mixed.

Live cattle are higher following yesterday’s bearish technical closes as traders anticipate higher cash cattle trade.
Packers continue to slowly establish cash cattle bids for the week, suggesting trade will again be pushed later into the week. While the extended negotiations have benefited packers for several weeks, that trend changed last week, and feedlots are expected to maintain the advantage when trade turns active. Most sources are expecting a $1 to $2 increase in the cash market.
Wholesale beef prices rose yesterday, with a 15-cent increase in Choice and a $3.61 jump in Select, narrowing the spread to $9.39. Movements were reported at 107 loads.
April live cattle fell to $163.15 before rebounding. Contract-high resistance is at $164.60.

Hog futures are higher, with spring- and summer-month contracts marking the strongest gains.

Nearby lean hog futures are higher as traders grow more confident that the cash index has carved a seasonal low.
The CME lean hog index is up 22 cents to $73.51 as of Feb. 6, marking the eight gain in the last 10 days. The cash index has nearly risen $1.50 from its late-January low.
Pork cutout values fell $3.06 yesterday to $78.56, following a $2.53 jump on Monday. Packers have battled to maintain the cutout above $80.00, though movement on price pullbacks remain solid, signaling good underlying demand. Packers moved 342.1 loads on Tuesday.
April lean hogs have pushed above yesterday’s high with initial resistance at $84.475.

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