Market Snapshot | July 27, 2022

Corn futures are 1 to 3 cents higher at midmorning.

• Corn futures are trading higher on concerns a return of temperatures well-into the 90s Fahrenheit next week in the Midwest may crimp yield prospects.
• The northwestern Corn Belt “is quickly becoming quite dry” and concerns are rising over crop conditions in this region the next two weeks if rain falls as lightly as expected, World Weather Inc. said today. “Hot weather is predicted for the region next week and if greater rain fails to evolve prior to that period the stress will become threatening to some crops.”
• Traders continue to watch for signs of progress in resuming grain shipments out of Ukraine. A Turkish official said all the details had been worked out for a resumption of Ukrainian grain exports via Black Sea ports, including a safe route for ships that will not require the clearing of sea mines.
• U.S. ethanol production fell 13,000 barrels per day (bpd) during the week ended July 22 to an average of 1.021 million bpd, still up 0.7% from the corresponding week last year. Ethanol stocks dropped 225,000 barrels to 23.328 million barrels.
• December corn futures overnight pushed above the 20-day moving average around $6.00 and reached $6.06 3/4, the contract’s highest intraday price since $6.09 on July 19.

Soy complex futures are broadly higher, with November soybeans up around 27 cents and soymeal up around $12; nearby soyoil is up more than 100 points.

• Soybean futures climbed to two-week highs, joining gains in corn amid concerns Midwest heat during key reproductive phases may hurt yields.
• Bunge Ltd. raised its full-year profit forecast today and said its agribusiness unit gained a lift from U.S. and Brazilian soybean crushing due to strong demand for meal and oil. The company’s CEO said it will be a slow process to move commodities out of Ukraine because of damage to the country's Black Sea ports.
• Indonesia launched road tests for two types of biodiesel containing 40% palm oil, hoping to conclude by the end of the year whether they are viable for public use.
• November soybeans extended Tuesday’s rally and climbed to $14.14 3/4, the contract’s highest intraday price since $14.18 on July 12. The contract still has an unfilled 9-cent gap under current prices created with Tuesday’s strong open.

Wheat futures are lower, led by declines of around 15 cents in spring wheat.

• Winter wheat futures erased overnight gains and turned lower as traders continued to monitor whether an agreement to resume Ukrainian grain shipments actually produces results.
• Scouts on Day 1 of the Wheat Quality Council’s annual spring wheat tour found an average HRS yield of 48.9 bu. per acre on routes through southern and eastern areas of North Dakota, up sharply from the five-year average of 39.0 bu. per acre on similar routes. The crop has benefited from favorable weather, the North Dakota Wheat Commission said.
• Taiwan tendered to buy 50,910 MT of U.S. milling wheat. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
• September SRW wheat overnight reached $8.18 3/4, the contract’s highest intraday price since July 21, before fading to losses.

Live cattle are mostly lower at mid-morning while feeder cattle are firmer.

• Live cattle are under mild pressure on expectations for further weakening in cash prices.
• Cash prices are expected to trade steady to weaker compared with last week’s $141.12 average, though meaningful transactions may not happen until late in the week. Packers have been slow to establish bids as they appear content to pull from committed supplies.
• Choice beef cutout values rose $1 Tuesday to $269.11 on solid movement of 115 loads.
• August live cattle fell to $136.425, a low for the week. Initial support comes in at the 10-day moving average around $136.175.

Hog futures are higher, led by a gain of more than $2 in the October contract.

• Hog futures are trading near three-month highs amid continued support from strength in cash fundamentals.
• The CME lean hog index rose 35 cents to $119.48 (as of July 25), the highest level since June 2021. August futures’ discount to the index has narrowed to about $1.
• Pork cutout values fell $1.05 Tuesday to $126.77, down from a 12-month high a day earlier. Movement totaled about 299 loads, slightly above the recent average.
• August lean hogs rose to $118.525, a high for the week and just under the three-month intraday high of $118.90 posted last Friday. A push above last week’s high may have bulls aiming for the April high at $121.25.