Market Snapshot | May 12, 2022

Corn futures are firmer at midmorning, led by gains of 2 to 4 cents.

• Corn futures rose to highs for the week ahead of USDA’s monthly Supply and Demand Report, which is expected to reflect tighter global grain supplies.
• In the report, USDA is expected to cut estimated U.S. corn ending stocks for 2021-22 by about 28 million bu. to 1.412 billion bu., based on a Reuters survey. USDA’s first estimate for 2022-23 U.S. ending stocks is expected at about 1.352 billion bushels.
• USDA reported net U.S. corn sales for the week ended May 5 at 192,700 MT for 2021-22, down 75% from the previous week, down 80% from the average for the previous four weeks and a marketing-year low. Net weekly sales for 2022-23 totaled 46,600 MT. Both numbers fell short of trade expectations ranging from 350,000 to 700,000 MT for 2021-22 and 150,000 to 650,000 MT for 2022-23.
• Also today, USDA announced daily sales of 612,000 MT of corn to China, with 68,000 MT for 2021-22 and 544,000 MT for 2022-23. Today’s report was USDA’s first corn sales announcement to China since April 28.
• Brazil’s National Supply Company (Conab) estimated the country’s 2021-22 corn production at a record 116.2 MMT, an increase of nearly 600,000 MT from the previous forecast.
• July corn futures reached $7.92 1/4, a high for the week, before fading around the 10-day moving average. Near-term resistance is seen at the 20-day moving average at $7.96, while initial support is seen at this week’s low of $7.69.

Soy complex futures are mixed, with soybeans mostly lower and soyoil solidly weaker, while soymeal is firmer.

• Soybean futures are under mild pressure following two days of gains as traders wait for the USDA Supply and Demand Report, which is expected to include cuts to projected 2021-22 U.S. and global ending stocks. Disappointing USDA export sales are also pressuring soybeans.
• Net weekly soybean sales totaled 143,700 MT for 2021-22, down 80% from the previous week, down 74% from the prior four-week average and a marketing-year low. Net sales for 2022-23 totaled 77,300 MT, including 66,000 MT for “unknown destinations.” Sales were near or below the low end of expectations ranging from 100,000 to 600,000 MT for both marketing years.
• Conab raised its 2021-22 soybean crop forecast for Brazil to 123.8 MMT from 122.4 MMT previously.
• China will auction another 500,000 MT of state-owned soybean reserves Friday, according to the National Grain Trade Center. It previously said 314,000 MT of state-owned reserves would be auctioned this week.
• July soybeans are trading inside Wednesday’s range, with initial resistance at Wednesday’s high of $16.15 and the 10-day moving average at $16.26. July soymeal dropped to a 3 1/2-month low before turning higher.

Wheat futures are higher, led by gains of mostly 8 to 11 cents in HRW and SRW contracts.

• HRW wheat climbed to two-month highs and spring wheat posted fresh contract highs amid concerns over adverse weather and tighter global supplies.
• Net weekly wheat sales totaled 14,100 MT for 2021-22, down 88% from the previous week, down 79% from the prior four-week average and a marketing year low. Net sales for 2022-23 totaled 124,300 MT. Sales were expected to range from 25,000 to 125,000 MT for 2021-22 and zero to 350,000 MT for 2022-23.
• Strategie Grains cut its EU wheat export forecast for 2021-22 by 1.5 MMT from last month to 29.9 MMT, citing stronger-than-expected Russian shipments even amid Western sanctions. The consultancy raised its EU 2022-23 wheat export forecast by 500,000 MT to 30.8 MMT.
• Japan purchased 196,560 MT of wheat in its weekly tender, including 87,640 MT U.S., 85,580 MT Canadian and 23,340 MT Australian.
• July SRW wheat rose as high as $11.27. A push above this week’s high at $11.35 may have bulls targeting the April high at $11.43 1/2.
• July HRW wheat touched $12.14 1/4, the contract’s highest intraday price since March 8. July spring wheat hit a contract high for the third day this week, reaching $12.65.

Live cattle and feeder cattle are moderately to sharply lower at midmorning.

• Live cattle futures continue to face pressure from softening cash trade and concerns high retail prices are curbing beef demand.
• Feeder cattle are under pressure from stronger corn prices, which remain near $8.00 on concerns over tight supplies and delayed planting.
• Live steers averaged $141.43 through Wednesday morning, down about $2 from last week’s average. Cash sources reported limited demand from packers in the northern market, where tighter supplies in recent weeks pushed prices higher.
• Wholesale beef prices remain near eight-week lows, with Choice cutout values down 16 cents Wednesday to $255.08. Movement was again strong at 185 loads, indicating that packers are cutting prices to spur retail buying.
• USDA reported net weekly U.S. beef sales at 28,400 MT for 2022, a marketing-year high and up 95% from the previous week.
• June live cattle are trading around the middle of this week’s range marked by Monday’s low at $131.025 and Wednesday’s high at $134.875.

Hog futures are solidly lower at midmorning and near four-month lows.

• Lean hogs extended the market’s recent slump amid bearish technicals and concerns over slower pork demand.
• The CME lean hog index rose 17 cents to $101.26, the highest since April 29. June hogs are trading at a discount to the cash index, which is rare for this time of year and illustrates heavily bearish sentiment is weighing on futures.
• Pork cutout values fell 70 cents Wednesday to $99.49, the lowest daily average since Feb. 8, while movement remained relatively light at 262 loads.
• USDA reported net weekly pork sales at 26,300 MT for 2022, up 10% from the previous week and up 14% from the prior four-week average.
• June lean hogs fell as low as $98.775, the contract’s lowest intraday price since $98.15 on Jan. 14. Further weakness may have bears targeting the January low at $95.30.