Market Snapshot | May 17, 2022

Corn futures are lower at midmorning, led by declines of about 8 cents in the July contract.

• Corn futures are under pressure after U.S. planting progress posted a strong advance amid warmer Midwest conditions last week.
• USDA late Monday said 49% of the U.S. corn crop was planted as of Sunday, up from 22% a week earlier but behind the 67% average for the previous five years. Progress met analysts’ expectations.
• Planting remains behind schedule, raising concerns over lower yield potential. Over the next two weeks, the Midwest is expected to receive a mix of rain and sunshine that will disrupt planting while keeping conditions favorable for newly planted crops, World Weather Inc. said today.
• “Planting will advance between rounds of rain, but rain will fall frequently enough that dry periods in most areas longer than a couple days will be rare,” the forecaster said.
• July corn futures fell as low as $7.97 1/4 overnight after gaining 28 1/4 cents Monday to $8.09 1/2, a two-week high. Initial resistance is seen at yesterday’s two-week high of $8.10 1/4.

Soy complex futures are mixed, with nearby soybeans 8 to 10 cents higher and nearby soyoil up 80 to 90 points, while soymeal is $2 to $3 lower.

• Nearby soybeans rose for a sixth straight session behind strengthening technicals and gains in crude oil. A jump in U.S. corn planting last week eased some concerns over a major shift to more soybean acres.
• USDA reported the U.S. soybean crop was 30% planted as of Sunday, up from 12% a week earlier but behind the 39% five-year average. Analysts expected plantings to be about 29% completed. The crop was 9% emerged as of May 15, behind the 12% five-year average.
• After recently unwinding long soyoil/short soymeal spreads, traders are putting some of those spreads back on this morning.
• July soybeans rose as high as $16.88 3/4, the contract’s highest intraday price since May 2.

Wheat futures are higher and trading near contract highs, led by HRW and SRW contracts

• Winter wheat futures rebounded from a downturn overnight. Deteriorating crop conditions continue to support prices.
• India eased export restrictions slightly, saying it will allow overseas wheat shipments awaiting customs clearance, also wheat exports to Egypt, the government said.
• USDA reported 27% of the winter wheat crop in “good” or “excellent” condition as of Sunday, down from 29% a week earlier.
• When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 6.5 points to 252.7, the lowest rating of the year and 73.8 points below the five-year average. The SRW crop improved 10.8 points to 357.1, its highest rating this spring, though that’s still 1.2 points below average for this date.
• July SRW wheat overnight rose as high as $12.75, near the contract high of $12.78 1/4. HRW and SRW trading limits are expanded $1.05 to following Monday’s limit-up closes.

Live cattle and feeder cattle futures are mostly firmer at midmorning.

• Live cattle futures are supported by corrective buying following recent losses and strength in wholesale beef.
• Feeder cattle are supported by gains in corn.
• Choice cutout values rose $1.36 Monday to $260.31, a two-week high, but movement was light at 95 loads. Monday’s wholesale beef trade continued to show retailers are selective buyers at current price levels. Given near-record retail beef prices, retailers are seemingly not wanting to get caught with too much inventory.
• June live cattle pushed above the 10-day moving average around $133.10 and rose as high as $133.925, the contract’s highest price since May 11. Further resistance is seen at the 20-day moving average around $134.60.

Hog futures are moderately to sharply higher, led by June and July contracts.

• Hog futures extended a recent corrective bounce amid ideas the market has established a near-term bottom, though extended gains likely will require upside leadership from the cash market.
• Pork cutout values rose 38 cents Monday to a one-week high of $101.55 on strong movement of nearly 357 loads.
• The CME lean hog index fell 42 cents to $100.07 (as of May 13), the lowest since April 18. After strong price gains the past two sessions, summer-month hog futures are trading at premiums to the cash index again.
• China will buy 40,000 MT of local frozen pork for its state reserves on May 20, according to a notice on the website of the reserves management center. The country is buying pork to support prices.
• June lean hog futures rose as high as $104.725, the contract’s highest intraday price since $106.725 on May 6. The most-active contract has rallied over $6 from a four-month intraday low of $97.10 reached May 12.