Market Snapshot | March 1, 2023

Corn futures are lower despite strength in soybeans and the winter wheat markets.
The Environmental Protection Agency proposed a rule today that would allow expanded sales of gasoline with higher ethanol blend in certain Midwest states, a win for both ethanol and farmers, which have sought the expansion for years.
Ethanol production for the week ended Jan. 24 fell 26,000 barrels per day (bpd) to an average of 1.003 million bpd. That was up 0.6% from the same week last year. Ethanol stocks declined 813,000 barrels to 24.78 million barrels.
Corn-for-ethanol use in January is expected to total 436.8 million bu., which would be up from December’s total of 425.3 million bu., but below 463.5 million bu. in January a year ago.
Weather overnight did not offer significant changes to Argentina’s weather which is expected to continue drier than usual through the next 10 days, according to World Weather Inc.
May corn fell as low as $6.22 1/4, trading below support at $6.24 1/2 for a second straight session. Initial resistance is at $6.41 1/4.

Soybeans are higher with soyoil gains pulling the complex higher as traders grow concerned about vegoil supplies amid heavy rains in Malaysia.
USDA is expected report January soybean crush at 189.6 million bu., according to a Bloomberg survey, which would be up from 187.4 million bu. in December, but below last year’s 194.3 million bushels.
Malaysian palm oil futures rebounded overnight from a near 2% drop in the previous session as heavy rains in the world’s second largest producer deepened supply concerns. The country is experiencing an excessive rain event, with torrential rain expected over the next five days.
World Weather notes Brazil will continue to see rain fall frequently with the interior south continuing to get rain most often and experiencing the greatest delays to soybean harvest.
May soybeans are trading within Tuesday’s wide range. Initial support lies at $14.80 1/2, while initial resistance is at $15.00 1/4.

Winter wheat futures are mostly 2 to 4 cents higher, while spring wheat is 2 to 4 cents lower.

Winter wheat futures are posting slight corrective gains.
SovEcon cut its Russian wheat production forecast to 85.3 MMT, down from 86 MMT previously due to challenging winter weather conditions.
India is expected to see hotter- and drier-than-normal weather over the next two weeks, which is likely to threaten the country’s wheat crop.
Early estimates for Australian winter crop production for 2023-24 have called for a lower output amid the high probability that the El Nino weather effect will appear later in the year and bring hotter, drier weather to the country.
World Weather notes dryness remains a concern in southern Texas, portions of West Texas and in western areas of hard red winter wheat country.
May SRW wheat is marking gains mostly within the range between initial resistance of $7.12 3/4 and initial support of $7.00 1/4.

Live cattle are moderately lower, while feeders are posting sharp losses.

Live cattle are under pressure as traders wait for cash cattle trade to develop.
This morning’s price action has narrowed the premium April live cattle hold to last week’s average cash price, despite expectations the cash market will show continued strength.
Wholesale beef prices continued to rise with a 61-cent increase in Choice to $288.95, the highest level since January 2022, while Select remained unchanged, putting the Choice/Select spread at $9.70.
April live cattle traded briefly above initial resistance near $165.92 to an intraday high of $166.10 before turning lower. Initial support remains at the 10-day moving average of $165.09.

Hog futures are steadily lower, with summer-month contracts posting the heaviest losses.

Lean hog futures are marking moderate to sharp losses as traders remain hesitant to build premiums in spring-and summer-month contracts.
The CME lean hog is up 29 cents to $78.51 as of Feb. 27.
Pork cutout value fell $1.58 on Tuesday to $84.36, led by a near $12 drop in bellies. The wholesale beef/pork ratio is currently at 3.43, which is particularly high, indicating pork is a bargain compared to beef.
April lean hogs are pivoting around yesterday’s low, with $84.375 serving as initial support. Initial resistance stands at 20-day moving average of $85.33.

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