Market Snapshot | May 20, 2022

Corn futures are slightly lower and trading in narrow ranges at midmorning but up from initial lows.

• Corn futures are under mild pressure from continued weakness in the wheat market and expectations for improved U.S. planting progress.
• The Midwest “will see a mix of rain and sunshine during the next two weeks that will disrupt planting while keeping conditions favorable for newly planted crops,” World Weather Inc. said. While rain expected this weekend and early next week may slow planting progress, today’s forecast is “drier in most areas for the last days of May and the first days of June.”
• Argentina could raise its limit for corn exports for the 2021-22 harvest to 35 MMT from 30 MMT currently, after limiting exports in December in an effort to curb inflation, Reuters reported.
• July corn futures overnight fell as low as $7.74 1/2, down from $7.81 1/4 at the end of last week and on pace for a third straight weekly decline. A push under initial support at this week’s low of $7.73 1/4 could have sellers targeting the May low at $7.69.

Soy complex futures are higher, with nearby soybeans up nearly 20 cents and nearby soymeal up more than $5; nearby soyoil is up around 170 points.

• Nearby soybean futures led soy complex gains, extending this week’s rally to three-week highs behind strong demand.
• Malaysia maintained its June export tax for crude palm oil at 8% and raised its reference price, the Malaysian Palm Oil Board said.
• China will auction another 500,000 MT of imported soybeans from state-owned reserves on May 27. China has been releasing soybean reserves on a weekly basis recently to boost supplies on the domestic market.
• July soybeans reached $17.10, up from $16.46 1/2 at the end of last week. Bulls are targeting $17.34, the April high, and the contract high at $17.41.

Wheat futures are lower, led by declines of nearly 50 cents in nearby spring wheat.

• Wheat futures extended this week’s selloff on continued profit-taking from sharp early-week gains and expectations rain in the U.S. Plains will boost dry crops.
• Russia’s wheat export tax fell for third straight week, dropping to $110.50 per MT for May 25-31, based on an indicative price of $357.90 per metric ton. The tax is down $1.40 from the previous week.
• France’s wheat crop ratings deteriorated sharply for a second straight week amid drought stress, dropping nine points to 73% “good” to “excellent,” according to the country’s ag ministry. The crop is now rated lower than last year’s at this stage.
• Nearby wheat futures have erased the early-week rally and are now lower heading for the first lower weekly closes in three weeks. SRW wheat fell as low as $11.68 3/4, the lowest since May 13 and down from $11.77 1/2 at the end of last week.

Live cattle and feeder cattle are mostly firmer at midmorning.

• Live cattle futures are trading in narrow ranges ahead of USDA’s Cattle on Feed Report that’s expected to show a further increase in feedlot inventories. Weakness in cash cattle and concerns over beef demand continue to limit price upside.
• Feeder cattle are mostly firmer behind weakness in corn futures.
• USDA’s Cattle on Feed Report is expected to show the May 1 feedlot inventory up 1.3% from year-ago, which would mark the fifth straight month of year-over-year gains. April placements will be closely studied after the March figure surpassed expectations. Placements last month declined 4.6% from year-ago, based on the average analyst estimate in a Reuters survey. Marketings are expected to be down 2%.
• Live steers averaged $140.21 through Thursday morning, down from last week’s average of $142.44.
• Choice cutout values rose $1.23 Thursday to $261.70, up from $258.95 at the end of last week, but movement was light at 86 loads. Retailers are largely finished th buying for Memorial Day weekend and concerns persist that high beef prices may curb demand during the summer grilling season.
• June live cattle rose as high as $132.325, up from $132.075 at the end of last week, but the market remains in a month-long downtrend. Initial resistance is seen at the 10-day moving average around $132.45. Key support is seen at the May low of $131.025.

Hog futures are solidly higher, led by June contract.

• Nearby hog futures are up sharply for the week amid beliefs the market has established a near-term bottom and begun a delayed seasonal rally.
• The CME lean hog index is up 29 cents today to $100.37 (as of May 18), the second straight daily gain and highest in a week. But with June hogs nearly $6 above the index, futures traders may be reluctant to build further premium until the cash benchmark shows sustained strength.
• Pork cutout values fell 15 cents Thursday to $103.46 but are still up from $101.17 at the end of last week. Movement was light at 220 loads.
• June lean hog futures reached $107.025, up from $100.75 at the end of last week and the contract’s highest intraday price since $107.525 on May 5. A close today above the 20-day moving average at $105.30 would further strengthen the technical posture and may have bulls aiming for the $110.00 level.