Market Snapshot | March 23, 2022

Corn futures are around a nickel higher at midmorning, led by nearby contracts’ jump near two-week highs.

• Nearby corn futures are supported by ongoing supply concerns surrounding the Russia/Ukraine war. New-crop December futures posted a contract high for the third day in a row.
• Ethanol production during the week ended March 18 averaged 1.042 million barrels per day (bpd), up 16,000 bpd from the previous week and up 13% from the same week in 2021, according to the Energy Information Administration.
• Ethanol stocks rose 203,000 barrels to 26.148 million barrels, the highest level since the week ended April 24, 2020.
• May corn rose to $7.70 1/2 shortly after today’s open, the highest intraday price since $7.80 1/4 on March 7. Further strength will have bulls targeting the contract high of $7.82 3/4 posted March 4. Additional upside targets include $8.00, based on the continuation chart.

May soybeans are up more than 20 cents, nearby soymeal is up nearly $5 and nearby soyoil is up over 100 points.

• Nearby soybeans rose for the third consecutive day behind strong demand and strength in global vegetable oil markets. Malaysian palm oil futures rose for a third straight session, while Nymex crude oil futures are up more than $5.
• Egypt's state grains buyer bought 80,000 MT of soyoil, paying 14% more per MT than it did in its previous tender in February, Reuters reported. This is Egypt’s first purchase of vegetable oils internationally since Russia’s Feb. 24 invasion of Ukraine.
• Argentine farmers have sold 10.8 MMT of soybeans during the 2021-22 season, down from 12.4 MMT last season.
• May soybeans pushed above the month’s previous high at $17.34 and hit $17.36 1/2, the highest since the contract high of $17.59 1/4 on Feb. 24. Additional upside targets include a 9 1/2-year high posted in late February at $17.65, based on the continuation chart.

Wheat futures are mostly lower at midmorning after fading from overnight gains.

• Nearby HRW and SRW futures pulled back from earlier gains on profit-taking, with expectations for further moisture relief in the U.S. Plains also limiting buyer interest.
• Disruptions from the Russia/Ukraine war continue to support prices. Ukraine’s spring crop-sowing area may be cut more than half from 2021 levels to 7 million hectares, the country’s ag minister said earlier this week. Prior to the invasion, seedings were expected to reach 15 million hectares.
• Ukrainian ports remained closed and the country is likely to export just 200,000 MT of wheat during March-June, according to analyst APK-Inform, which cut its 2021-22 forecast for Ukrainian wheat exports 4.2 MMT to 18.3 MMT.
• May SRW wheat is trading within yesterday’s range, with initial resistance seen at yesterday’s high of $11.69 1/4, also a two-week high, and support at yesterday’s low of $11.02 1/4. May HRW and spring wheat contracts are also holding within yesterday’s ranges.

Live and feeder cattle futures are lower at midmorning.

• Live cattle futures tumbled to the lowest levels in over a week as slow cash trade dampens last week’s momentum.
• Feeder cattle futures are under pressure from corn futures that are nearing $8.00.
• Cash cattle trade has been slow to develop this week, with few packers stepping up with bids ahead of USDA’s monthly Cattle on Feed Report Friday. The report is expected to show record March 1 inventories.
• Firm wholesale beef may limit seller interest. Choice cutout values rose $1.47 yesterday to $259.97, near a one-month high. Movement was strong at 125 loads.
• June live cattle futures fell as low as $134.075, the lowest intraday price since $132.825 on March 14. In addition to the March 14 low, downside targets for bears include the low for the month at $130.975.

Lean hog futures have pulled back from an opening surge to contract highs but remain sharply higher

• Hog futures gapped higher at today’s open behind continued strength in cash fundamentals, with the CME lean hog index off slightly but still near a six-month high.
• The CME lean hog index price slipped 3 cents to $101.77, still at a premium of about 50 cents to nearby April futures.
• Wholesale pork remains firm. Pork cutout values jumped $5.10 yesterday to $106.71, near a two-week high and led by a gain of nearly $13 in hams. Movement totaled 273 loads.
• June lean hogs reached a contract high at $124.45 and left a gap on the daily chart between yesterday’s high at $120.225 and today’s low at $121.20.