Market Snapshot | January 11, 2023

Corn futures are around a penny higher at midsession.

Corn is trading modestly higher for the second straight session as traders await USDA’s report data on Thursday. Crude strength and dollar weakness is supportive.
China’s Commerce Ministry said on Wednesday it will continue to impose anti-dumping and anti-subsidy tariffs on the animal feed ingredient dried distiller grains (DDGs) imported from the U.S. for another 5 years.
Ethanol production for week ended Jan. 5 rose 99,000 barrels per day (bpd) to an average 943,000 bpd and reflects a 6.3% decrease from the same week last year. Ethanol stocks fell 644,000 barrels to 23.8 million barrels.
Argentina’s ongoing drought that has parched fields and cut production of key crops is likely to break in coming months, though it could be the end of March before rain and soil moisture return to normal, according to the Buenos Aires Grain Exchange.
Taiwan’s MFIG purchasing group bought about 65,000 MT of U.S. corn.
A Reuter’s poll indicates USDA on Thursday will report Dec. 1 stocks at 11.153 billion bu., though the range is from 10.737 to 11.937 billion bu. This compares to 11.602 billion bu. reported a year-ago. USDA will also update is U.S. and global balance sheets on Thursday and issue its final estimate of the 2022 corn crop.
March corn remains cautiously within the previous session’s range, staying below initial resistance around $6.60 where the 20-and 40-day moving averages have nearly converged. Initial support lies at Tuesday’s close of $6.55.

Soybeans are mostly 4 to 6 cents higher, while March meal futures are more than $4.00 higher and March soyoil is just below unchanged.

Soybeans are taking spillover gains from soymeal strength along with support from the crude oil market.
USDA reported a daily export sale of 124,000 MT of soybeans for delivery to “unknown destinations” for the 2022-23 marketing year.
Some crops in Rio Grande do Sul, Brazil should see rising levels of stress until showers return on Thursday as soil moisture is short and temperatures will be warm to hot, according to World Weather, Inc.
Mato Grosso and nearby areas need of drier weather in the last week of the month to reduce concerns over soybean quality declines and to ensure the crop is harvested in time to get the safrinha corn crop planted during the favorable period.
Malaysian palm oil futures fell for a second straight session on Wednesday to close at their lowest level in nearly three weeks amid growing fears around waning demand after early Jan. exports dropped by nearly half.
A Reuter’s poll suggests USDA’s Dec. 1 soybean stocks will be pegged around 3.132 billion bu., though the expected range varies from 3.0 to 3.22 billion bushels. USDA will also update is U.S. and global balance sheets on Thursday and issue its final estimate of the 2022 soybean crop.
March soybean futures remain within the previous session’s range, with first resistance standing at the 10-day moving average of $14.96 3/4, while initial support lies near the 40-day moving average of $14.71 1/4.

Wheat futures are slightly higher, led by 5- to 6-cent gains in SRW contracts.

Wheat futures are trading slightly higher after reaching 15-month lows early in the previous session.
A group of South Korean flour mills issued a tender to buy an estimated 50,000 MT of milling wheat sourced from the U.S.
Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), is believed to have booked at least 60,000 MT of Russian wheat in an international tender on Tuesday.
A Reuters poll shows the average estimate for all winter wheat seedings is 34.485 million acres on the Jan. 12 USDA report. This would reflect over a 1.2 million acre increase from 2022 seedings. USDA will also issue Dec. 1 stocks and update its U.S. and global balance sheets on Thursday.
March SRW remains within the previous session’s range, with first resistance standing at $7.42 and initial support at Tuesday’s low of $7.20 1/2.

Live cattle are slightly lower at midmorning with feeders posting heavier losses.

Nearby live cattle are lower as cash negotiations have been slow to develop, restricting buyer interest.
We anticipate higher cash cattle prices compared with last week’s $157.74 average, though active trade may not be seen until Thursday or Friday.
Wholesale beef prices fell on Tuesday, with Choice down $1.71 and Select $1.27 lower, with a $26.20 spread.
Packers have struggled to keep Choice above $285.00, though dips below the level have attracted increased retailer buying. Packers moved 128 loads of beef on Tuesday following the price drop.
February live cattle traded as low as $157.05, dipping below initial support near $157.26. Next support lies at the 20-day moving average of $157.02 while first resistance stands at the previous session’s close of $157.75.

Hog futures are lower, with deferred contracts posting hefty losses.

Lean hogs are facing followthrough selling amid a weakening cash market.
The CME lean hog index is down another 35 cents to $76.44 (as of Jan. 9) as the seasonal decline continues.
The premium in the February contract is down to around $3. While that’s small compared to the normal season cash increase into mid-February, traders will remove more premium if the cash index continues to drop.
Cutout values dropped 62 cents on Tuesday to $81.73, led by a 70-cent drop in hams.
February lean hog futures dropped as low as $78.925, testing initial support at $79.23. Initial resistance stands at the previous session’s close of $79.525.

Tags