Market Snapshot | January 31, 2023

Corn futures are posting 1- to 2-cent gains at midmorning.

• Corn futures have reversed overnight losses as SRW wheat and crude oil futures provide spillover strength.
• Hungary, Poland, the Czech Republic, Slovakia, Romania and Bulgaria asked the EU to transport Ukrainian grain beyond the country’s immediate neighbors to mitigate problems caused by increased grain imports from Ukraine into the region, which has cut prices and hurt local farmers.
• World Weather Inc. reports Argentina’s first half of February outlook calls for below-average precipitation in much of the nation with temperatures near to above normal.
• Further delays in planting the safrinha (second) corn crop in Brazil, could lead to dry conditions during pollination and grain fill as the rainy season usually ends in April, making the next few weeks of weather critically important, noted World Weather.
• March corn fell as low as $6.79 3/4, testing initial support at $6.79, with additional support at the 100-day moving average of $6.77 1/2. Initial resistance stands near the 40-day moving average of $6.83 1/2.

Soybeans are mixed, with the March contract around 6 cents higher, while new-crop is mostly a penny lower. March meal futures are around $5.00 lower and March soyoil is about 45 points firmer.

• Soybeans remain narrowly mixed, with meal weakness supplying spillover pressure, despite unfavorable forecasts in Argentina through the first half of February.
• Brazil’s production powerhouse, Mato Grasso, is expected to receive between 200-300 millimeters of rainfall over the next 30 days, with some southeast regions potentially facing up 500 mm, according to the state’s agriculture institute.
• South American crop consultant, Dr. Michael Cordonnier trimmed his estimate for the Uruguay soybean crop by 300,000 MT to 2.2 MMT, given persistent hot, dry conditions. The consultant left his estimates for Argentina and Brazil unchanged at 39 MMT and 151 MMT, respectively.
• Malaysian palm oil futures fell 3% overnight, ending a three-day climb as Indonesia maintained its domestic sales rule and traders fretted about slow export demand.
• March soybeans reached as high as $15.42 3/4, marking a session high just below initial resistance at $15.43 1/2. Initial support lies at $15.21 1/2.

SRW wheat futures are leading the wheat complex higher, posting 8- to 10-cent gains, while HRW is 6 to 8 cents higher and HRS futures are 3 to 5 cents higher.

• Winter wheat futures are notching higher following a further decline in the U.S. HRW wheat crop during January.
• Individual state crop conditions ratings showed a further decline in the U.S. HRW wheat crop during January. When the updated crop condition ratings were plugged in to the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the HRW crop dropped 9.2 points from the end of December to a rating of 269.1.
• U.S. HRW production areas are not likely to see much significant moisture in the next two weeks, but crops are dormant and unlikely to change much, according to World Weather.
• Jordan purchased 60,000 MT of optional origin milling wheat overnight, while Egypt tendered to buy up to 60,000 MT of wheat via the World Food Bank.
• March SRW wheat traded as high as $7.65, breaching resistance near $7.62 1/4. Next resistance stands at $7.71 3/4. Initial support lies near $7.43 ¼.

Live cattle are narrowly mixed, while feeders are posting solid gains.

• Live cattle futures are choppy as traders wait on cash cattle trade to develop later in the week.
• February live cattle futures finished Monday $3.50 above last week’s cash cattle prices, while the April contract maintained an $8.10 premium.
• Traders began to build premium in the cash market amid stressful feedlot conditions and expectations the cash market will begin an extended price rally.
• Packers will have fresh contract supplies available beginning Wednesday, possibly limiting cash market strength.
• Traders anticipate USDA’s Cattle Inventory Report this afternoon will show further contraction of the U.S. cattle herd. Analysts expect the Jan. 1 U.S. cattle herd to be down 2.9% from year-ago, with beef cows/heifers down 4.2% and beef replacement heifers 3.5% under year-ago, according to an Urner Barry survey. 
• April live cattle have traded as high as $163.575, before weakening. Initial resistance is near $164.23. Initial support lies near the convergence of the 10- and 20-day moving averages around $161.06.

Hog futures are posting slight to moderate losses at midsession.

• April lean hogs are marking losses as futures’ premiums to the cash index limits buyer interest.
• The CME lean hog index is up 7 cents to $72.71 (as of Jan. 27) extending its gains for the fourth straight day. Though the index is only up 61 cents during that stretch, it’s reflecting the steadiest gains since a five-day rally in late October.
• Pork cutout values dropped $1.03 on Monday to $80.28, with 272.27 loads on the day.
• China’s sow herd increased 0.6% in December from November to 43.9 million head, according to ag ministry data. Sow inventories increased 1.4% from the end of 2021. China’s pig herd expanded 1.9% in December from the previous month to 452.6 million head, a 0.7% increase over the previous year.
• April lean hogs dipped below support at the 10-day moving average of $85.81, with further support lying near $85.02. Initial resistance stands at the 20-day moving average of $87.87.