Market Snapshot | January 5, 2022

Corn futures are 3 to 4 cents lower at midmorning.

• Corn futures fell in a corrective setback from yesterday’s gains, with spillover from slumping wheat adding pressure.
• Persistent dryness and other adverse crop conditions in South America remains supportive, prompting at least two private forecasters this week to cut their production estimates.
• U.S. ethanol production fell 11,000 barrels per day (bpd) to 1.048 bpd for the week ended Dec. 31, according to the Energy Information Administration. Production rose 12.1% from the corresponding week last year and rose 4.8% from pre-Covid levels two years ago.
• Ethanol stocks increased 638,000 barrels to 21.36 million barrels.
• March corn is holding a narrow range, with support near today’s low at the 10-day moving average of $6.02 1/2 and trendline support around $5.96. Upside levels to watch include yesterday’s high at $6.11 1/4.

Soy complex futures are mixed, with nearby soybeans up 4 to 6 cents and soyoil up around 100 points; soymeal is mostly lower.

• Soybean futures turned higher after trading lower earlier this morning.
• USDA reported a sale of 132,000 MT of soybeans for delivery to unknown destinations during the 2022-23 marketing year. This is the first daily soybean sales announcement since Dec. 17.
• More rain fell on a large part of northern Brazil yesterday. Some beneficial but mostly light rain fell in parts of central and northern Rio Grande do Sul and in Parana in southern Brazil as well, World Weather Inc. said.
• Paraguay and most of southern Brazil will see erratic shower activity through Jan. 10, “leaving parts of the region with temporary improvements in conditions for crops, while other areas continue to dry down,” World Weather said.
• March soybeans reached $13.99, the contract’s highest intraday price since $13.99 1/2 on July 19. A push above the July high may have bulls targeting the contract high of $14.45 1/2 posted June 7.

Wheat futures are lower, led by double-digit declines in HRW contracts.

• Wheat futures resumed the market’s downward bias after yesterday’s technically- and short covering-driven gains. Spring wheat dropped to a 2 1/2-month low.
• Reports of poor crop conditions in the HRW regions of the U.S. Plains supported prices yesterday, but wheat remains burdened by sluggish exports and bearish charts.
• A small weather disturbance with snow today may help provide protection to some Plains crops from extreme cold expected later this week, World Weather said. Areas most at risk will be minor wheat areas of central Nebraska and possibly fields in far southwestern Kansas and far southeastern Colorado

• China will auction another 500,000 MT of state-owned wheat reserves on Jan. 12. This is the second straight week of wheat sales from state reserves after China had not held any auctions since October.
• March spring wheat overnight fell under its 100-day moving average at $9.65 and dropped to $9.55 1/2, the contract’s lowest intraday price since $9.52 3/4 on Oct. 19.
• March SRW wheat fell as low as $7.56, near this week’s low at $7.52 3/4. March HRW fell as low as $7.86.

Cattle futures are lower at midmorning.

• Live cattle futures extended yesterday’s declines as the lack of direction from the cash market limited early buying interest.
• With cash bids and asking prices not yet established, it appears it will be late in the week before there’s active cash trade.
• Recent strength in wholesale beef prices suggests retailer demand is improving. Choice cutout values rose 79 cents yesterday to a four-week high at $266.82, while Select rose 33 cents to 259.23. Movement totaled 160 loads.
• February live cattle fell as low as $136.875, just above yesterday’s low at $136.775.

Lean hog futures are higher, led by nearby contracts.

• Hog futures are higher in a corrective bounce from the past week’s slide, with signs of firming cash fundamentals also supporting prices.
• The latest CME lean hog index rose 90 cents to $72.75, the highest level since Dec. 20. But futures’ large premium to the index may limit buying interest.
• Pork cutout values fell 55 cents yesterday to an average of $85.47. Movement was strong at nearly 435 loads.