Market Snapshot | February 9, 2022

Corn futures are 4 to 9 cents higher in old-crop contracts at midmorning.

• Corn futures posted contract highs behind bullish technicals and fund-led buying ahead of USDA’s Supply & Demand Report at 11 a.m. CT.
• The report focus centers on USDA’s updated South American crop projections, which will likely drop due to drought but remain above most private forecasters. USDA is expected to lower its Brazil corn crop estimate to 113.63 MMT from 115 MMT and its Argentina corn production forecast to 52.16 MMT from 54 MMT.
• Traders expect U.S. corn ending stocks to be lowered 28 million bu. to 1.512 billion bushels.
• U.S. ethanol production averaged 994,000 barrels per day (bpd) for the week ended Feb. 4, the lowest since the week ended Oct. 1 but up 6.1% from the comparable week last year, according to the Energy Information Administration.
• Ethanol stocks dropped 1.056 million barrels to 24.799 million barrels, the first decline in six weeks.
• South Korea purchased 68,000 MT of corn from an unspecified origin out of a tender for 140,000 MT but passed on another tender for 68,000 MT of corn.
• March corn futures reached a contract high at $6.44 1/2, topping the previous high set Jan. 31 by 2 cents. December futures hit a contract high at $5.85 1/2.

Soy complex futures are broadly higher, with soybeans up 12 to 16 cents after reaching fresh contract highs; soymeal futures are up around $2 after setting contract highs; soyoil is up around 90 points.

• USDA is expected to lower its forecast for Brazilian soybean production to 133.65 MMT from 139 MMT last month. Argentina’s soybean crop estimate is expected to be cut to 44.51 MMT from 46.5 MMT.
• U.S. soybean stocks for 2021-22 are expected to be lowered 40 million bu. to 310 million bushels.
• USDA reported a daily sale of 240,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Since Jan. 28, USDA has reported a combined 2.66 MMT of soybean sales to China or “unknown destinations.”
• March soybeans hit a contract high at $15.92, surpassing the previous high of $15.89 1/2 and the highest price for a nearby contract since June.

Wheat futures are mostly 7 to 11 cents higher

• Winter wheat futures rose to the highest levels in over a week behind spillover support from corn and soybeans and ongoing concerns over tight global supplies of milling wheat.
• USDA is expected to lower its 2021-22 global ending wheat stocks estimate by about 60,000 MT, to 279.89 MMT, underscoring tight supplies for milling-quality wheat.
• U.S. wheat ending stocks for 2021-22 are expected to inch up 1 million bu. from last month to 629 million bushels.

• March SRW wheat climbed as high as $7.88 1/4, the highest intraday price since Jan. 31.

Live cattle futures are higher at midmorning after reaching fresh contract highs.

• Cattle futures rose on technical strength and a general bullish commodity market backdrop, along with signs of improved beef demand.
• Choice cutout values fell $1.50 yesterday to $277.46, the lowest daily average since Jan. 10, but movement was strong at 180 loads.
• Traders are watching still-developing cash trade. Nearby February live cattle futures are about $2.00 over last week’s five-area live steer average of $139.76, suggesting a firmer tone is expected the next few weeks.
• USDA price and export updates in today’s Supply and Demand Report will be of interest. In its January report, USDA increased projected 2022 U.S. beef production 0.6% and raised its forecast for average live steer prices for the sixth consecutive month.
• April live cattle reached a contract high at $142.925. March feeder cattle hit the highest price since Jan. 3.

Lean hog futures are firmly higher with the exception of the nearby February contract.

• Deferred lean hogs jumped to contract highs for the third session in a row behind technical strength, firmer cash fundamentals and a tight supply outlook.
• February hogs are pulling back given their premium to the cash index.
• The CME lean hog index is up 75 cents to $86.82.
• Pork cutout values fell 90 cents yesterday to $97.29 but remain near a two-month high and movement was strong at about 348 loads.
• April lean hogs posted a contract high at $105.275.