Market Snapshot | January 12, 2022

Corn futures are 2 to 3 cents lower at midmorning in light action ahead of USDA’s reports.

• Futures continue narrow-range trading as the market awaits USDA’s reports at 11 a.m. CT that are expected to include a slight upward revision to the U.S. corn crop estimate and downward revisions to South American crop forecasts.
• USDA is expected hike its final estimate for the 2021 U.S. corn crop by about 7 million bu., to 15.069 billion bu., based on a Reuters survey of analysts. The projected crop would be the second largest on record, trailing only the 2016 harvest of 15.146 billion bushels.
• USDA reported a daily sale of 100,000 MT of corn to “unknown destinations” for 2021-22.
• U.S. ethanol production declined 42,000 barrels per day (bpd) to 1.006 million bpd for the week ended Jan. 7, the lowest production since the week ended Oct. 1, according to the Energy Information Administration.
• Ethanol stocks rose 1.552 million barrels, the second largest weekly build ever, to 22.91 million barrels, the highest since the week ended Feb. 12, 2021.
• The Biden administration is considering lowering the 2022 ethanol blending mandate below the proposed 15 billion gallons amid backlash from the oil refining lobby and unions arguing the shrinking U.S. ethanol industry can no longer support the target, Reuters reported.

Soybean futures are mostly 5 to 6 cents lower and soyoil is down 70-plus points, while soymeal is up less than $1.

• USDA is expected to increase its estimate for the 2021 U.S. soybean crop by about 8 million bu. to a record 4.433 billion bushels.
• USDA is also expected to reduce its projection for Brazil’s soybean crop by about 2.38 MMT, to 141.62 MMT. Argentina’s crop is expected to be cut 1.39 MMT, to 48.11 MMT.
• USDA reported a daily sale of 132,000 MT of soybeans to China for 2022-23. USDA hadn’t reported a daily soybean sale to China since Dec. 17, though it has reported two soybean sales to unknown destinations since then.
• March soybeans fell as low as $13.79 after dropping yesterday to $13.72 1/2, the low so far this week. Other chart levels to watch include the 10-day moving average around $13.77.

Wheat futures are broadly lower, led by declines in HRW contracts.

• USDA’s Winter Wheat Seedings Report is expected to show all U.S. winter wheat plantings at 34.255 million acres, up from 33.648 million in 2021 and the highest acreage since 2016.
• Wheat will likely get much of its post-report price direction from the corn and soybean markets.
• FranceAgriMer lowered its forecast for 2021-22 French soft wheat exports outside the European Union to 9 MMT, down 200,000 MT from last month.
• Japan is seeking 80,000 MT of feed wheat and 100,000 MT of feed barley. Iran tendered to buy a nominal 60,000 MT of milling wheat from unspecified origins.

Cattle futures are lower, led by declines in nearby live cattle.

• Live cattle are under mild pressure amid continue slippage in the cash market. Cash cattle yesterday traded at $136 to $137, down around $1 to $2 from last week. The USDA-reported live steer average dropped in four of the previous five weeks.
• Strength in wholesale beef should limit futures weakness. Choice cutout values rose $2.18 yesterday to $278.22, the highest daily average since Nov. 26 and an indication of scaled-up demand from retailers restocking following the holidays. Movement totaled a strong 150 loads.
• February live cattle fell as low as $136.60. A push under the 100-day moving average around $136.15 and/or last week’s low at $136.025 may have bears targeting the December low at $135.50.

Lean hog futures are solidly higher in a corrective bounce following recent sharp declines.

• Firming cash fundamentals supported hog futures and buying emerged after nearby futures’ declines the previous three sessions sharply shrank the premium with the CME lean hog index.
• The CME lean hog index is up another 43 cents to $75.13, the highest since mid-November and about $3.60 above February futures.
• Pork cutout values fell $4.80 yesterday to an average of $81.62, but movement was strong at 413 loads.
• February hog futures rose as much as $1.475 after dropping to a one-month intraday low at $77.50 yesterday.