Market Snapshot | July 6, 2022

Corn futures are 5 to 6 cents lower at midmorning.

• December corn retreated from modest corrective gains overnight and fell for a fifth consecutive session as an outlook for more rainfall in the Midwest overshadowed lower-than-expected USDA crop ratings.
• More rain fell across the Corn Belt overnight and another round of important rain will occur through Friday, World Weather Inc. said. “Much of the Midwest will see least temporary improvements in soil moisture and conditions for crops, but hot temperatures and light rain in some southern areas will evaporate the moisture quickly,” the forecaster said. “Significant rain and notable improvements in soil moisture should occur in many areas from eastern Nebraska to Ohio and Kentucky.”
• USDA late Tuesday rated 64% of the corn crop as either “good” or “excellent” as of Sunday, down from 67% in those categories a week earlier and even with the same date in 2021. Traders expected a rating of 65%.
• When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 5.4 points to 364.1. That was 6.8 points below the five-year average for the beginning of July.
• Ukraine expects a grain harvest (not including oilseeds) of at least 50 MMT this year, which is “not bad given all the difficulties,” the country’s first deputy agriculture minister said, though down sharply from last year’s record 86 MMT crop.
• December corn fell to $5.66 1/2, the contract’s lowest intraday price since $5.65 on Feb.3.

Soy complex futures are mixed, with new-crop soybeans down 2 to 4 cents, soymeal firmer and soyoil down under heavy pressure.

• November soybeans erased overnight gains and resumed Tuesday’s slide, hitting the lowest levels in over five months on expectations Midwest rains will boost yield prospects.
• USDA rated 63% of the U.S. soybean crop in “good” to “excellent” condition as of Sunday, down from 65% from a week earlier but above 59% last year at this time. Traders expected a reading of 64%.
• On the Pro Farmer CCI, the soybean crop dropped 5.7 points to 354.9, which was 2.5 points below average for the date and the first time the crop rating has been below the five-year average so far during the growing season.
• After rising overnight, November soybeans retreated shortly after today’s open and fell to $13.02 1/2, the contract’s lowest intraday price since $13.00 3/4 on Jan. 25.

Wheat futures are lower, led by declines of 18 to 20 cents in HRW contracts.

• Nearby winter wheat futures fell for the fifth straight session on chart-driven fund selling and expanding harvest pressure, even as harvest progress fell short of trade expectations.
• USDA reported 54% of the U.S. winter wheat crop was harvested as of Sunday, up from 41% a week earlier and ahead of the 48% average for the previous five years. Harvest progress fell short of analysts’ expectations of 57% complete.
• USDA also rated 66% of the spring wheat crop “good” to “excellent,” up from 59% a week earlier and exceeding trade expectations for 59%. On the Pro Farmer CCI, the U.S. spring wheat crop improved 7.9 points to 368.3 and 30.5 points above average for the beginning of July.
• Ukraine’s grain traders union UGA revised up its forecast for the country’s grain and oilseed production by 2.9 MMT to 69.4 MMT, including 27.3 MMT of corn and 20.8 MMT of wheat.
• September SRW wheat futures dropped to $7.85 1/4, the contract’s lowest intraday price since mid-February.

Cattle futures are higher at midmorning, led by gains in live cattle.

• Live cattle are higher as recent cash strength outweighs wholesale beef weakness and recession-related concerns over demand. Nearby futures remain within the past two week’s range as traders wait for cash trade to develop.
• Feeder cattle are modestly higher with support from the corn market’s slump to five-month lows.
• Live cattle futures face conflicting signals, with cash prices last week reaching the highest in seven years, but wholesale beef demand eroding as retailers scale back purchases.
• Choice boxed beef prices firmed 84 cents Tuesday to $264.66, but movement was light at 109 loads. With retailers likely to do only some fill-in buying following the holiday, beef movement isn’t expected to be strong, especially with retail prices high.
• Traders will watch for mid-week cash developments after live steers last week averaged $146.16, up $1.61 from the previous week’s average.

Hog futures are higher, led by a gain of more than $3 in the August contract.

• August lean hogs gapped higher and jumped to a two-week high on followthrough from Tuesday’s strong close and a firm tone in the wholesale market.
• The CME lean hog index is down 12 cents to $110.58, the fourth straight daily decline. Despite the recent index weakness, futures’ gains this week indicate traders anticipate the cash market will strengthen over the short-term. August futures’ discount has narrowed to about $1.53 from nearly $8 at the end of last week.
• Pork cutout values rose $5.73 Tuesday to $114.48, a three-week high. Movement was strong at 306 loads.
• August lean hogs’ strong open left a gap on the daily chart. The most-active contract reached $109.75, the highest intraday price since June 22. Market bulls may be targeting the late-June high at $110.225.