Market Snapshot | July 25, 2022

Corn futures are 11 to 13 cents higher at midmorning.

• Corn futures rose for the first session in five after a missile strike on Ukraine’s Odesa port over the weekend stirred concerns over an agreement to resume the country’s grain exports.
• Expectations for a return of Midwest heat after brief relief also boosted prices. Weekend rain improved conditions in many areas especially in the southwestern Corn Belt and the Delta, World Weather Inc. said. However, the following week is drier and warmer in the central U.S., with ridge building expected once again.
• Large speculators continued to slash bullish bets in grain markets. The managed money net long in the corn market fell 25,871 contracts to 125,303 futures and options contracts as of the week ended July 19, the lowest net long since September 2020, according to data from the Commodity Futures Trading Commission.
• USDA reported 724,124 MT (28.5 million bu.) of corn inspected for export during the week ended July 21, down from 1.075 MMT a week earlier and around the middle trade expectations.
• Traders await USDA’s weekly ratings updates after today’s close. Last week, USDA reported 64% of the U.S. corn crop in “good” or “excellent” condition as of July 17, unchanged from a week earlier.

Soybean futures are around 25 cents higher at midmorning, with soymeal around $12 higher. Soyoil is favoring the downside.

• Soybean futures are higher on followthrough from a late rebound last Friday, with support also stemming from strength in corn and wheat and prospects for a return to Midwest heat as the crop enters key reproductive phases.
• A drier-biased weather pattern will resume this weekend and will continue through at least Aug. 8 along with warmer temperatures starting next week and the steady declines in soil moisture expected will lead to rising levels of crops stress, World Weather said. “Stress to crops and declines in yield potentials should increase.”
• Traders will watch for signs of stabilization in USDA crop ratings this afternoon. USDA last week rated the soybean crop 61% “good” to “excellent” as of July 17, down from 62% a week earlier and the fifth straight weekly decline.
• USDA reported 388,212 MT (14.3 million bu.) of soybeans inspected for export during the week ended July 21, down from 436,829 a week earlier and within trade expectations ranging from 100,000 to 575,000 MT.

Wheat futures are posting double-digit gains but are well off their highs.

• Wheat futures are higher behind bargain buying and renewed global supply concerns after a Russian strike at a Ukraine port.
• A day after Ukraine and Russia signed a deal to resume grain exports from Ukraine’s Black Sea ports, Russian missiles hit Odesa, the biggest of those ports. Despite the Russian attacks on Odesa, Ukrainian officials say they are moving forward with implementing the deal to restart grain exports. Ukraine’s infrastructure minister hopes the first shipments will begin this week.
• USDA reported 475,426 MT (17.5 million bu.) of wheat inspected for export during the week ended July 21, up from 191,333 MT a week earlier and at the high end of trade expectations ranging from 200,000 to 550,000 MT.

Live cattle are higher at midmorning while feeders are lower.

• Live cattle rebounded from initial weakness, with nearby August testing last week’s high.
• Feeder cattle are under pressure from strength in corn.
• USDA’s Cattle on Feed Report late Friday showed estimated feedlot placements during June at 1.629 million head, down 2.4% from the same month a year earlier but higher than trade expectations for a decline of 5%, based on a Reuters survey of analysts. Other aspects of the report were largely price-neutral.
• USDA’s Cattle Inventory Report Friday showed the U.S. cattle herd contracted 2.0% as of July 1, while the beef cow herd declined 2.4% and the calf crop is estimated to be 1.4% lower than last year.
• Also Friday, USDA’s Cold Storage Report showed a June record 516.2 million lbs. of beef in storage. While that could imply sluggish demand, it may also be related to facilities building inventories due to ongoing strong exports.
• Live steers averaged $140.65 last week through Friday morning, down from the previous week’s average of $142.12 and the third consecutive weekly decline.
• Choice beef cutout values fell 64 cents Friday to $267.12, down $1.79 from the end of the previous week. Movement was slower at 95 loads.

Hog futures are mostly lower, led by declines in the nearby August contract.

• Hog futures are under corrective, profit-taking pressure following last week’s rally to three-month highs. Cash fundamentals remain firm.
• The CME lean hog index is up another $1.18 to $118.22, a 13-month high. The lead contract has slipped to about a $1.36 discount to the index, but seller interest likely be limited until the cash index signals the seasonal rally has exhausted.
• Pork cutout values rose $1.84 Friday to $125.74, up $3.56 from the end of the previous week and near a 12-month high. Movement was slower at 239.5 loads.
• USDA reported pork stocks declined less than average during June to 541.0 million lbs., down 5.1 million lbs. from May.