Market Snapshot | January 18, 2023

Corn futures are choppy with a modest upside bias at midsession.

Corn is finding mild support from strength in crude oil futures and a weaker U.S. dollar.
Crude oil futures are drawing support from optimism around Chinese demand as investors looked beyond disappointing 2022 growth and anticipate a rebound in economic activity with the easing of Covid-19 restrictions.
World Weather Inc. says today’s European weather model has increased precipitation across Argentina for next week and the America model is also producing rain for most of the nation, but not quite as aggressively.
March corn traded as high as $6.88 3/4 overnight, though it failed to find sustained buying above Tuesday’s high. Initial resistance stands at $6.91 3/4, with first support at the 100-day moving average of $6.74 1/2.

Soybeans are 7 to 9 cents lower, while March meal futures are around $3.00 lower and March soyoil is about 60 points higher.

Soybeans are facing some profit-taking after reaching over a 7-month high overnight.
Monthly soybean crush declined 0.9% in December from a month earlier, falling below an average of analyst expectations, while soyoil stocks rose to an eight-month high, according to NOPA data released on Tuesday.
Brazil’s weather briefly improved Tuesday with less frequent and less significant rain for much of the nation’s summer crop areas, though more drying is needed, according to World Weather.
India’s soymeal exports could more than double in 2022-23 as a drought in top exporter Argentina lifted global prices, prompting buyers to seek cheaper supplies, according to Reuters.
Malaysian palm oil futures closed higher today, tracking strength in crude and rival edible oils, although talks of key buyer India weighing higher import duties partially dampened sentiment.
March soybeans traded as high as $15.48 1/2 overnight, nearing resistance at $15.49 1/2, before retreating. First support lies near $15.21.

Winter wheat futures are modestly higher, while spring wheat is narrowly mixed.

Winter wheat futures are trying to work higher as traders consider the future of global supplies, with favorable outside markets underpinning gains.
Russia, the world’s largest wheat exporter, needs to maintain stable food reserves and “cannot allow everything to be dragged abroad,” said President Vladimir Putin, in comments that may signal restrictions on some of its exports.
U.S. hard winter wheat areas will get another chance for precipitation Friday into Saturday, though that event will be more limited with the boost in precipitation only providing temporary relief from drought, according to World Weather.
France, the EU’s biggest wheat producer is expected to ship 10.6 MMT outside the bloc in 2022-23, up from December’s forecast of 10.3 MMT and 21% above last season’s levels.
China will auction 140,000 MT of wheat from its reserves on Feb. 1. The sale includes 100,000 MT purchased in 2016 and 2017 and another 40,000 MT of 2014, 2015 and 2016 wheat from its temporary reserve.
Initial resistance for March SRW wheat futures stands at $7.62. Initial support is near the 10-day moving average of $7.44 3/4.

Live cattle and feeders are mostly firmer at midmorning.

Live cattle futures are finding support from light corrective buying following Tuesday’s technical breakdown.
Buyers remain cautious as they await cash market direction.
After Tuesday’s price pressure, cash sources expect packers to be even more passive in cash negotiations in hopes of enticing feedlots to sell cattle at lower prices again this week.
Central U.S. winter storms will bring 8 to 12 inches of snow from Nebraska to upper Michigan over the next two days, which will result in travel delays and stress to livestock from northeastern Colorado to northern Michigan, according to World Weather.
February live cattle remain within Tuesday’s trading range, with initial support at the 40-day moving average near $156.37, while first resistance is at $157.40.

Hog futures are posting heavy losses, with deferred contracts marking the sharpest declines.

Lean hogs are facing pressure from the continued drop in the cash index, following Tuesday’s corrective gains.
The CME lean hog index is down another 16 cents to $74.18 (1s of Jan. 16) and is currently $2.60 below year-ago when it was nearly $6.75 off its seasonal low.
Deferred contracts have more than erased Tuesday’s corrective gains.
China imported 200,000 MT of pork in December, up 20,000 (11.1%) from November and 20.1% more than last year. That was the largest monthly pork import total since Nov. 2021.
China’s agriculture ministry urged farmers to take measures to reduce excess pork output and pressure on prices, which have fallen below the cost of breeding due to weak consumption.
February lean hog futures gapped lower to start the session and have traded as low as $77.125. Initial resistance lies near $76.72, with additional resistance at $77.75.

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