Market Snapshot | January 19, 2022

Corn futures are around 6 cents higher in old-crop contracts at midmorning.

• Corn futures climbed near two-week highs on spillover strength from soybeans and wheat, along with ongoing concerns over adverse crop conditions in South America.
• Last weekend brought some rainfall relief to dry parts of South America, but more rain in needed in key areas, such as southern Brazil.
• Paraguay and far southern Brazil “will see little to no rain of significance and hot temperatures through Saturday,” World Weather Inc. said today. “Crop stress will increase as moisture from recent rain is lost to evaporation while areas that missed out on rain see further declines in yields.”
• March corn futures rose as high as $6.09 1/4, the contract’s highest intraday price since $6.09 3/4 on Jan. 5. A push above the Jan. 5 high may have bulls targeting a six-month intraday high at $6.17 3/4, reached Dec. 28.

Soy complex futures are broadly higher, with soybeans up 18 to 19 cents, soymeal up over $5.00 and soyoil up over 100 points.

• Soybeans rose on corrective buying following a three-session losing streak and a shrinking crop outlook in South America. Broad commodity market strength is also supporting the soy complex.
• USDA’s attache in Brazil lowered its estimate for the country’s soybean production, saying drought in some regions and excessive rain in others has dampened prospects for a record crop. The attache’s estimate at 136 MMT is lower than USDA’s 139 MMT projection in last week’s Supply and Demand Report.
• March soybeans rose as high as $13.87 1/2, after dropping 8 1/2 cents yesterday to $13.61 1/4, the contract’s lowest settlement since $13.55 1/2 on Jan. 3. Support is seen at yesterday’s intraday low at $13.49 3/4.

Wheat futures are sharply higher, led by gains of over 20 cents in spring wheat contracts.

• Wheat futures rose sharply for the second day in a row, with SRW contracts nearing a three-week high amid concerns over Russia potentially invading Ukraine and implications for global wheat trade.
• Argentina produced a record wheat crop of 21.8 MMT in the 2021-22 marketing year, topping the country’s previous high of 19 MMT in 2018-19 crop year, the Buenos Aires Grains Exchange said. The harvest, which ended this month, came in 2.8 MMT higher than the exchange’s initial estimate.
• Japan received no offers from a tender to buy 80,000 MT of feed wheat and 100,000 MT of feed barley. Jordan tendered to purchase 120,000 MT of optional origin milling wheat. Iran tendered to buy 60,000 MT of milling wheat.
• March SRW wheat rose as high as $7.86, the contract’s highest intraday price since $7.87 3/4 on Dec. 31.

Cattle futures are higher at midmorning, with live cattle reaching a two-week high.

• Live cattle futures are gaining support from general commodity market strength and a surge in wholesale beef prices that indicates strong retailer demand.
• Choice cutout values rose $1.63 yesterday to $289.49, the highest daily average since Nov. 5.
• Cash markets are expected to erode further this week, though the recent slowdown in slaughter appears to be waning. USDA estimated cattle slaughter through the first two days of the week at 230,000 head, up 3,000 head from last week and even with year-ago.
• Live steers last week averaged $136.61, down $1.80 from the previous week and the fifth weekly decline in the past six. Light initial sales in the Southern Plains started around $137.
• April live cattle rose as high as $143.625, the most-active contract’s highest intraday price since $143.90 on Jan. 4.

Lean hog futures are higher, with the April contract trading at seven-month highs.

• Hogs are higher on strengthening cash fundamentals and increasingly bullish technicals.
• April hogs pushed above resistance at highs earlier this month to reach the highest price since mid-June.
• The next CME lean hog index is up another 88 cents to $76.78, the highest since Nov. 10.
• Pork cutout values fell $4.73 yesterday to $87.21 on movement of about 332 loads. The cutout market remains volatile, with packers struggling to sustain retailer buying interest above $90.00.