Market Snapshot | July 7, 2022

Corn futures are 5 to 7 cents higher at midmorning.

• Corn futures extended Wednesday’s late rebound and continued higher on corrective buying following the past week’s steep selloff. Traders may also be restoring some weather premium into prices amid forecasts for drier weather during mid-July.
• A transition to drier weather and less favorable crop conditions will begin Saturday and will continue through at least July 18 and possibly deeper into the month, World Weather Inc. said today. “Subsoil moisture should be high enough to prevent serious crop stress in much of the Midwest during the next 10 days, but some crops in areas that miss out on significant rain this week should soon see rising levels of stress,” the forecaster said.
• Conab raised its total 2021-22 corn production estimate for Brazil to 115.7 MMT, up 440,000 MT from its previous forecast and up from 87.1 MMT last year. Conab raised its 2021-22 corn export forecast by 500,000 MT to 37.5 MMT.
• December corn rose as high as $6.08 3/4 after leaving a 1/4-cent gap on the daily bar chart at the open of overnight trade. The most-active contract on Wednesday fell to a five-month low of $5.66 1/2 on Wednesday.

Soy complex futures are higher, with new-crop soybeans up 30-plus cents, with soymeal and soyoil also notably higher.

• Soybean futures joined corn and wheat in a continued corrective rebound from recent sharp declines.
• Conab lower its projection for Brazil’s 2021-22 soybean crop to 124.0 MMT from 124.3 MMT in its previous outlook.
• Indonesia is considering cutting its palm oil export levy to encourage more shipments, a cabinet minister said on Thursday. To jumpstart exports, the government needs to make extra effort to quickly cut domestic stocks and prop up palm fruit prices for farmers that have slumped since a three-week ban on exports in May, Senior Minister Luhut Pandjaitan said at an industry event.
• November soybeans reached $13.72 3/4, up from a 5 1/2-month low of $13.02 1/2 hit Wednesday.

Wheat futures are sharply higher, with gains of generally 25 to 30 cents.

• Winter wheat futures rose for the first session in the past six as corrective buying emerged in the wake of the steep selloff the past two weeks.
• Conab said it expects Brazil’s wheat planted area to increase 6.6% to 2.92 million hectares, with expected yields rising 10.3%. Conab projects record wheat production of 9 MMT in 2022-23.
• Effective July 12, India will require firms to secure permission before exporting wheat flour. After India banned wheat exports in mid-May, demand for wheat flour jumped. By requiring permission to export wheat flour, New Delhi seeks to better control domestic supplies before exports are allowed. 
• Japan purchased 122,420 MT of wheat from its weekly tender, including 66,370 MT U.S. and 56,050 MT Canadian. Egypt purchased 63,000 MT of German wheat. The Philippines tendered to buy at least 50,000 MT of optional origin feed wheat.
• September SRW wheat rose as high as $8.46 after dropping Wednesday to $7.85 1/4, the contract’s lowest intraday price since Feb. 18. September HRW reached $8.86 1/2 after sinking Wednesday to $8.32 1/2, also the lowest since Feb. 18.

Cattle futures are lower at midmorning after fading from initial strength.

• Live cattle futures are lower after failing to generate sustained followthrough buying interest from a strong finish Wednesday. Prices briefly rose to two-week highs before fading.
• Traders are expecting steady to firmer cash cattle prices to develop this week, though negotiations have been slow thus far.
• Wholesale beef strength should provide underlying support for futures. Choice beef surged $3.39 Wednesday and packers moved a solid 121 loads on the day.
• Feeder cattle are lower following renewed strength in corn futures.
• August live cattle earlier touched $135.725, the contract’s highest intraday price since June 23, before dropping to losses.

Hog futures are mostly higher, led by gains in fall and winter contracts.

• August lean hogs extended sharp gains the previous two sessions and reached the highest level in over two months, as technical strength and easing demand concern outweighs cash index weakness.
• The CME lean hog index is down 65 cents to $109.93 today (as of July 5), the fifth straight daily decline. August futures now hold a small premium to the index after trading at a discount recently.
• Pork cutout values dropped $2.98 Wednesday, driven by a $22.46 plunge in belly prices. All other cuts aside from hams traded higher.
• For the week ended July 1, the pork price in China was 26.25 yuan ($3.91) per kilogram, up 14.9% from the previous week, according to the ag ministry. The ministry attributed the jump in price to declining hog supplies in the northern part of the country and “reluctance to sell” by producers.
• August lean hogs reached $111.75, the contract’s highest price since $113.50 on April 29.