Market Snapshot | January 6, 2022

Corn futures are 2 to 3 cents lower at midmorning.

• Corn futures fell for a second day on spillover pressure from sharply weaker soybeans and wheat prices. Disappointing weekly export sales contributed to selling pressure.
• USDA reported net U.S. corn sales of 256,100 MT for the week ended Dec. 30, down 80% from the previous week and down 81% from the average for the previous four weeks. Sales were expected to range between 500,000 MT and 1.2 MMT.
• Adverse weather stressing crops in South American continues to underpin the market. Far southern and central Brazil received only light rains over the past day, while other areas, including Mato Grosso, received excess rain.
• March corn is holding a narrow range, with support at the 20-day moving average around $5.96 3/4 and resistance at this week’s high of $6.11 1/4. Further downside support is seen at the 40-day moving average at $5.89.

Soy complex futures are broadly lower, with nearby soybeans down mostly 12 to 18 cents, soymeal down $5 to $6 and nearly soyoil slightly lower.

• Soybean futures fell for the first day in five on profit-taking in the wake of a three-week rally and lower than expected export sales.
• Net weekly U.S. soybean sales were a marketing-year low at 382,700 MT, down 27% from the previous week and down 63% from the average for the previous four weeks, USDA reported. Weekly export sales fell short of expectations ranging from 400,000 MT to 1.3 MMT.
• Top buyers included China, at 353,900 MT, including 264,000 MT switched from unknown destinations and decreases of 3,700 MT.
• Also today, USDA reported a sale of 102,000 MT of soybeans for delivery to Mexico during the 2021-22 marketing year. Yesterday, USDA reported a sale of 132,000 MT of soybeans for delivery to unknown destinations during the 2022-23 marketing year.
• Brazil-based consultancy AgRural slashed its Brazilian soybean crop estimate by 11.3 MMT to 133.4 MMT due to heat and drought in southern Brazil. It now forecasts Brazil’s soybean yield will be the lowest since 2015-16.
• AgRural said Paraná has been hit hardest, with drought spreading from western areas of the state in December. The firm also cut its production forecasts for the Rio Grande do Sul, Santa Catarina and to a lesser extent Mato Grosso do Sul.
• March soybeans fell as low as $13.70, down from a sixth-month intraday high of $13.99 yesterday. Support is seen at the 10-day moving average around $13.64 1/2.

Wheat futures are sharply lower, with most contracts down more than 20 cents.

• Winter wheat and spring wheat futures sank to the lowest levels since mid-October on weak export numbers and technical pressure after prices broke under key chart levels.
• Net weekly U.S. wheat sales were a marketing-year low at 48,600 MT for 2021-22, down 76% from the previous week and down 87% from the prior four-week average. Sales were expected to be 150,000 to 400,000 MT.
• Selling accelerated in March SRW futures after prices pushed under the December low at $7.51, sending the contract to $7.36 3/4, the lowest intraday price since Oct. 14. Support is seen at the 200-day moving average at $7.30 3/4.

Live cattle futures are under pressure and trading near two-week lows; feeders are also lower.

• Live cattle futures extended a week-long selloff on sliding cash prices a and slower slaughter pace.
• Cash cattle traded around $138 in the Southern Plains and $220 in the northern dressed market yesterday. With futures under pressure, some feedlots opted to sell at prices $1.00 to $2.00 below last week’s average.
• Lagging slaughter so far this week may be stirring concern over a backlog of animals. Packers slaughtered an estimated 340,000 head of cattle so far this week, down 18,000 from the same period last week.
• Futures’ declines may be limited by strength in the wholesale beef market. Choice cutout values rose 11 cents yesterday to $266.93, the highest daily average since Dec. 7.
• Weekly U.S. beef sales posted a net reduction of 3,900 MT, a marketing-year low and down from net sales of 6,300 MT the previous week, USDA report, citing reductions primarily for South Korea (2,300 MT), China (1,200 MT) and Japan (400 MT).
• February live cattle fell as low as $136.375, the contract’s lowest intraday price Dec. 21.

Lean hog futures are higher, led by nearby February.

• February lean hogs climbed to the highest level in over a week on signs of firming cash fundamentals.
• The latest CME lean hog index rose $1.12 to $73.87. Futures’ large premium to the index is so far not limiting buying interest.
• Wholesale pork has also firmed, with cutout values up 45 cents yesterday to an average of $85.92, led in part by a gain of $4.72 in bellies. Movement totaled 326.53 loads.
• Net weekly U.S. pork sales totaled 19,400 MT for 2021, up six-fold from 3,200 MT the previous week but down 6% from the previous four-week average. Sales for 2022 totaled 18,600 MT.  
• February lean hogs hit $84.05, the highest intraday price since $84.225 on Dec. 29.