Market Snapshot | January 10, 2022
Corn futures are 4 to 5 cents lower in most contracts at midmorning.
- Corn futures fell under profit-taking pressure following last week's gains and spillover from sharp declines in the soy complex. The market awaits USDA’s Jan. 12 reports on U.S. and South American production, quarterly stocks and updated balance sheets.
- South American weather remains in trade focus, with little rain and hot temperatures expected from Paraguay to western Parana and Rio Grande do Sul in Brazil through Saturday, but increased rain chances next week.
- USDA reported 1.023 MMT of corn inspected for export during the week ended Jan. 6, up from 759,563 MT the previous week. Trade expectations ranged from 600,000 MT to 1.25 MMT.
- USDA reported daily corn sales totaling 132,000 MT to Mexico, including 77,000 MT for 2021-22 and 55,000 MT for 2022-23 delivery. Today’s announcement follows a daily sale last Friday for 176,784 MT of corn to Mexico in the current marketing year.
- Large speculators reduced their net long position in corn for the first time in five weeks, the Commodity Futures Trading Commission's weekly Commitments of Traders report showed. The managed money net long in corn futures and options fell 7,440 contracts to 365,905 contracts for the week ended Jan. 4.
- March corn futures fell as low as $5.96 3/4 before finding support just under the 20-day moving average at 5.98 1/4. Further support is seen at the 40-day moving average at $5.90 1/2, with resistance at last week’s high of $6.11 1/4.
Soy complex futures are broadly lower, led by declines of more than 20 cents in soybeans and a drop of over $7.00 in several soymeal contracts; soyoil is down roughly 60 to 80 points.
- Soybeans fell on profit-taking following last week’s rally to seven-month highs.
- Next weekend may bring a shift in the weather pattern in Brazil, with light and mostly inconsequential rain before showers and thunderstorms become better organized beginning Jan. 16, World Weather said.
- Rain expected from Jan. 16-19 “is not likely to be heavy in many areas, but at least some relief from dryness should occur and crops that have not been too badly harmed by dryness will respond to the moisture and yield potentials may increase,” the forecaster said.
- USDA reported 905,549 MT of soybeans inspected for export during the week ended Jan. 6, down from 1.614 MMT the previous week and below trade expectations ranging from 950,000 MT to 1.5 MMT.
- Large speculators increased their net long position in soybeans for the fourth week in a row as prices rose early this year, based on CFTC data. The managed money net long in soybean futures and options rose 839 contracts the week ended Jan. 4 to 98,919 contracts, the biggest net long since mid-June.
- March soybeans fell as low as $13.79 before rebounding. Chart levels to watch include support around the 10-day moving average at about $13.74 and resistance at last week’s high of $14.15.
Wheat futures are mixed, with SRW and HRS futures higher and HRW lower.
- SRW and HRS futures posted a modest rebound from overnight losses while HRW wheat remained under pressure from weak technicals and poor export demand.
- USDA reported 233,159 MT of wheat inspected for export during the week ended Jan. 6, up from 230,361 MT the previous week. Trade expectations ranged from 175,000 MT to 400,000 MT.
- Large speculators boosted their net short position in SRW wheat as prices fell early this year. The managed money net short increase 8,071 futures and options contracts the week ended Jan. 4 to 19,845 contracts, the biggest net short since mid-July.
- USDA’s Winter Wheat Seedings Report Jan. 12 is expected to show all U.S. winter wheat plantings at 34.255 million acres, up from 33.648 million in 2021, based on a Reuters survey.
- Ukraine has exported 33.5 MMT of grain so far in 2021-22, up 23% from the same stage last year, ag ministry data showed. The total included 16.1 MMT of wheat, 5.3 MMT of barley and 11.8 MMT of corn.
- March SRW futures fell as low as $7.48 before rebounding and climbing as high as $7.64 1/2. Chart levels to watch include resistance at the 100-day moving average of about $7.69.
Live cattle and feeder cattle futures are lower.
- Live cattle extended last week’s declines on pressure from an eroding cash market, with February futures falling near a three-week low.
- Live steers ended last week at an average of $138.58, down from the previous week’s average of $139.59.
- Cash direction this week may be influenced by how much packing plants lose to Covid absenteeism. Worker shortages weren’t widespread or severe last week, but slower processing at some plants appeared to pressure cash trade.
- Cattle slaughter last week was an estimated 620,000 head, down nearly 5.0% from the comparable week in 2021.
- Continued gains in wholesale beef suggests stepped-up demand from retailers re-stocking after the holidays. Choice cutout values rose $3.26 Friday to $271.82, up $6.56 for the week and the highest daily average since Dec. 6.
- February live cattle fell as low as $136.30, the lowest intraday price since Dec. 21.
Lean hog futures are down sharply, led by April and May contracts.
- Lean hog futures fell near the lowest levels in almost a month amid followthrough pressure from sharp losses Friday.
- The CME lean hog index is up 16 cents to $73.73, near a seven-week high posted early last week.
- Traders are narrowing the premium February hogs hold to the cash index.
- Pork cutout values ended last week at an average of $85.90, down $5.45 from a week earlier. Movement Friday totaled 392 loads.
- Signs of tightening hog supplies may eventually help futures find support, as slaughter rates have lagged year-ago levels.