Market Snapshot | July 21, 2022

Corn futures are around a dime lower at midmorning.

• Corn futures are under pressure from expectations for rain and cooler temperatures in the Midwest next week. U.S. Midwest crop areas “will continue in mostly good shape, despite dry pockets,” World Weather Inc. said today. “Some relief to developing dryness from Nebraska to Minnesota is expected over the coming week.”
• Talks between Turkey, Russia, Ukraine and the United Nations on resuming Ukrainian grain exports through the Black Sea are going well so far, Turkish Foreign Minister Mevlut Cavusoglu said today, adding he was hopeful about reaching a deal.
• USDA reported net U.S. corn sales during the week ended July 14 of 33,900 MT for the 2021-22 marketing year, down 43% from the previous week and down 82% from the average for the previous four weeks. For 2022-23, net sales totaled 570,200 MT, up from 348,200 MT the previous week and exceeding trade expectations for sales of 100,000 to 500,000 MT.
• December corn overnight fell as low as $5.71 1/4, the contract’s lowest intraday price since a five-month low of $5.66 1/2 posted July 6.

Soy complex futures are lower, with soybeans down around 25 cents.

• New-crop soybeans extended an overnight tumble to two-week lows on expectations for reduced Midwest heat and a drop of nearly $4 in crude oil futures.
• Weekly USDA export numbers were slightly above expectations but still conveyed a bearish trend. USDA reported net weekly soybean sales totaling 203,500 MT for 2021-22, primarily for China (146,900 MT, including 125,000 MT switched from unknown destinations). That snapped a three-week string of net old-crop sales reductions. For the third consecutive week, independent of the reported sales for the current week, there were negative adjustments to a previous week.
• For 2022-23, net soybean sales totaled 254,700 MT, up from113,900 the previous week and within trade expectations and also primarily for China (136,000 MT).
• November soybeans fell to $13.04 1/4, the contract’s lowest intraday price since $13.02 1/2 on July 6, before rebounding slightly.

Wheat futures are mixed at midmorning.

• Wheat futures continued a sideways consolidation as traders watched for developments on a potential resumption of Ukrainian grain shipments.
• Concerns over extreme heat stressing crops in Europe provided some support.
• USDA reported net U.S. wheat sales of 511,100 MT for 2022-23, down 50% from the previous week and down 10% from the prior four-week average. Sales fell within trade expectations ranging from 300,000 to 850,000 MT.
• September SRW wheat is trading in a narrow range between Wednesday’s high and low at $8.43 1/2 and $8.01. Initial resistance is seen at Wednesday’s high and the 20-day moving average around $8.53. Key support comes in at last week’s low of $7.65 3/4.

Live cattle are mostly lower and feeder cattle are mildly firmer at midmorning.

• Live cattle are extending sideways consolidation trade, with expectations for weaker cash prices offset to some extent by stronger export readings.
• Cash cattle trade has been light so far this week, with price ranging from $136 in the Southern Plains to $145 in the northern market. But the bulk of trade has been at steady to $1 lower prices.
• Choice beef cutout values fell $2.04 Wednesday to $270.53 but movement was again strong at 119 loads. August live cattle rose 2.5 cents Wednesday to $135.75.
• USDA reported net weekly beef sales of 23,800 MT for 2022, up from 9,200 MT the previous week and up 97% from the prior four-week average. 
• August live cattle continue to trade within yesterday’s range of $135.25 and $136.325.
• Feeder cattle are being supported by weakness in corn, though buyer interest is limited.

Hog futures are mostly lower, with the exception of the nearby August contract.

• August lean hog futures gapped higher a second consecutive day and extended a rally to three-month highs behind continued strength in cash fundamentals. Deferred contracts are under light pressure.
• The CME lean hog index is up another 46 cents to $116.37 (as of July 19), the highest level since June 2021. August futures’ discount to the index has narrowed to about 17 cents, and the contract likely will retain support until the cash benchmark shows signs of topping.
• Pork cutout values fell 75 cents Wednesday to $124.37 on lighter movement of 224 loads.
• Net weekly pork sales of 20,600 MT for 2022 were up 13% from the previous week but down 23% from the prior four-week average. 
• August lean hogs reached $116.85, the contract’s highest intraday price since $117.525 on April 25. Further strength may have market bulls targeting the April high at $121.50.