Market Snapshot | July 28, 2022

Corn futures are 11 to 12 cents higher at midmorning.

• Corn futures extended overnight gains and have reached the highest prices since early last week on concerns Midwest heat during the first 10 days of August may harm yield prospects.
• The northwestern Corn Belt along with the Northern Plains “will be drier and warmer than usual during the coming 10 days,” World Weather Inc. said. “Crop moisture stress is expected to expand and intensify in these areas because of limited rain and warm to hot temperatures next week and into the following weekend.”
• USDA reported net U.S. corn sales of 150,300 MT during the week ended July 21 for delivery during the 2021-22 marketing year, up from 33,900 MT the previous week.
• For 2022-23, net sales totaled 193,700 MT, primarily for Mexico (107,300 MT). New-crop sales fell short of trade expectations ranging from 200,000 to 625,000 MT.
• December corn reached $6.20, the contract’s highest intraday price since $6.23 3/4 on July 18.

Soy complex futures are mixed, with November soybeans up around 27 cents and nearby soyoil is up around 300 points; soymeal is lower.

• Soybean futures climbed for a fifth straight session and hit two-week highs amid concerns Midwest heat during key reproductive phases may hurt yields.
• USDA reported net weekly soybean sales reductions of 58,600 MT for 2021-22. This marked the fourth week in the past five with net old-crop sales reductions.
• For 2022-23, net weekly sales totaled 748,800 MT, primarily for China (538,000 MT) and “unknown destinations” (199,000 MT). New-crop sales easily topped expectations ranging from 100,000 to 500,000 MT.
• Soyoil futures are being supported by the Sustainable Aviation Fuel tax credit in the reconciliation deal, though that would still need to pass Congress.
• November soybeans rose to $14.38, the contract’s highest intraday price since the same high posted July 11. A break above resistance at the 40-day moving average just under $14.39 may further embolden bulls.

Wheat futures are higher, led by gains of around 15 cents in SRW contracts.

• Winter wheat futures sustained overnight gains with support from gains in corn and soybeans. Strength was more limited in spring wheat in the wake of more strong yield estimates from a crop tour.
• USDA reported net weekly wheat sales of 412,000 MT for 2022-23, down 19% from the previous week and down 29% from the average for the previous four weeks. Sales were within trade expectations ranging from 250,000 to 625,000 MT.
• Scouts on Day 2 of the Wheat Quality Council’s annual spring wheat tour found an average HRS yield of 47.7 bu. per acre on routes through central and northern North Dakota, up from the five-year average of 37.9 bu. per acre on similar routes. But the crop’s lagging maturity, estimated to be two to three weeks behind normal, have raised some concerns that yields may fall short of expectations.
• September SRW wheat is trading within yesterday’s range and is bumping up against resistance at the 40-day moving average of $8.15.

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

• Nearby live cattle are under mild pressure from weakness in the cash market, but signs that beef demand appears to be holding up despite recession concerns is adding support.
• Cash cattle trade started around $135 in the Southern Plains and $225 in the Nebraska dressed market on Wednesday, down around $1 and $2, respectively, compared with last week. But pressure on futures should be limited with August live cattle trading more than $4 below last week’s average cash price of $141.12.
• Choice beef cutout values fell $1.12 Wednesday to $267.99 but movement was strong at 146 loads.
• Net weekly U.S. beef sales totaled 25,300 MT for 2022, up 6% from the previous week and up 66% from the prior four-week average. 
• October live cattle are trading within last week’s range, with initial support at this week’s low of $141.425.

Hog futures are higher, led by strong gains in the August contract.

• Hog futures extended this week’s rally and climbed to the highest levels in over three months behind continued strength in cash fundamentals.
• The national direct cash hog price jumped $5.70 Wednesday, fueled by gains in the western Corn Belt. Cash sources signal buyers are actively competing for supplies, which should keep the CME lean hog index climbing.
• The CME lean hog index is up another 25 cents to $119.73 (as of July 26), a 13-month high. August futures shifted to a premium of about 62 cents today from a discount in recent days.
• Pork cutout values rose 2 cents Wednesday to $126.79 on light movement of about 218 loads.
• USDA reported net U.S. pork sales of 21,600 MT for 2022, up 5% from the previous week but down 16% from the prior four-week average. 
• October lean hogs reached $97.875, the contract’s highest intraday price since $99.40 on April 22. Further gains may have bulls targeting the April high at $100.375.