Market Snapshot | January 4, 2023

Corn futures are 10 to 13 cents lower at midsession.

Corn futures are facing followthrough selling, pressured by weaker crude oil futures on concerns spreading Covid-19 infections in China could dampen the global economy.
Argentina’s weather will by drier than usual over the next 10 days and temperatures will slowly rise above normal. World Weather, Inc. says “Excessive heat is expected in Argentina, Uruguay and a part of Rio Grande do Sul late this week through the weekend and into early next week.”
According to the Buenos Aires Grains Exchange, as of last Thursday, 28% of Argentina’s corn was rated “fair” or “bad,” up two points on the week and well above the previous year’s 8%. “Good” or “excellent” remained unchanged at 15%, but much lower than 58% last year.
March corn plunged as low as $6.53 1/4 after gapping lower to start the session. Near-term support stands at the Dec. 7 low of $6.35.

Soybeans are narrowly mixed, with March soymeal more than $2.00 lower while March soyoil is around 10 points higher.

Soybeans are trying to work higher in corrective trade, but buyer interest is limited by heavy selling in corn, wheat and the crude oil market.
USDA reported daily sales of 124,000 MT of soybeans to unknown destinations in 2022-23.
World Weather says most areas in Brazil will experience a good mix of rain and sunshine during the next two weeks, there is rising potential for excessive moisture and flooding in Sao Paulo, southern Minas Gerais and northeastern Parana during the next 10 days because of frequent heavy rainfall and saturated soil.
The Buenos Aires Grain Exchange rated Argentina’s soybean crop at 28% “fair” or “bad” last Thursday, a three-point increase from the week prior. Only 10% of the crop was rated “good” to “excellent,” down from 12% and well below the year-ago rating of 57%.
Malaysian palm oil futures slipped from a near five-week high traded in the previous session, though expectations of tightening supplies limited losses.
Chinese President Xi Jinping has said that he wants to take the China/Brazil comprehensive strategic partnership “to a higher level from a strategic and long-term perspective for the benefit of the two countries and two peoples”
March soybeans are extending yesterday’s losses, making a low at $14.84 1/4, just below the 20-day moving average.

Wheat futures are sharply lower, led by 20-plus cent losses in SRW and HRW contracts.

Wheat futures are facing additional selling as traders eye Black Sea export activity and U.S. exports remain poor.
Ukraine’s efforts to increase exports under the Black Sea grain deal with Russia are currently focused on securing faster inspections of ships rather than including more ports in the initiative, according to a Senior Ukrainian official.
Since the beginning of the 2022-23 marketing year, Russia exported 24.9 MMT of wheat, an increase of 3.2 MMT over a year ago.
March SRW traded as low as $7.45 1/4 after ending the previous session on the low. Next support stands at the early December low of $7.23 1/2.

Live cattle are moderately higher, with feeders posting strong gains at midmorning.

Feeder cattle are supported by the heavy selling in corn.
Live cattle futures turned higher after marking a low-range close Tuesday following sharp losses in the previous session.
Cash sources continue to expect firming cash trade this week.
Wholesale beef prices posted strong gains on Tuesday, with Choice up $4.97 and Select $3.70 higher, amid solid movement of 117 loads.
The recent surge in wholesale beef prices has led packer margins higher, giving them room to actively bid for cash cattle if needed.
February live cattle have made a mild recovery, poking above the 10-day moving average at $157.59, with resistance standing at $157.78.

Hog futures are lower at midmorning.

Lean hogs are extending losses for the fourth straight session after a sharp drop and a low-range close on Tuesday.
The CME lean hog index is 74 cents lower to $79.45 (as of Jan. 2). While that’s still 85 cents above the seasonal low of $78.60 to date, traders remain relatively cautious.
February lean hog futures finished Tuesday $5.625 above today’s cash index quote, which is around $2 below the 10-year average rally in the cash market from not until mid-February. This morning’s losses have decreased the premium.
The pork cutout value also dropped $1.90 yesterday, though movement was strong at 370.5 loads.
February lean hogs fell as low as $84.05, with next support lying at $83.79.

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