Market Snapshot | September 21, 2022

Corn futures are 7 to 8 cents lower at midsession.

• December corn faded from an overnight climb to one-week highs on corrective selling following Tuesday’s gains and pressure from the accelerating harvest.
• Ethanol production fell 62,000 barrels per day (bpd) for the week ended Sept. 16 to 901,000 bpd. That was 2.7% below the corresponding week last year and the lowest weekly average since the week ended Feb. 26, 2021. Ethanol stocks dropped 342,000 barrels to 22.501 million barrels.
• Escalating tensions with Russia are limiting seller interest. Russian President Vladimir Putin ordered Russia’s first mobilization since World War II and backed a plan to annex swaths of Ukraine. He also warned the U.S. and its western allies he would be prepared to use nuclear weapons to defend Russia.
• Ukraine’s grain exports are down 43% year-over-year so far in the 2022-23 at 6.88 MMT, the agriculture ministry said today. Ministry data showed that exports since July 1 included 3.95 MMT of corn, 2.30 MMT of wheat and 598,000 MT of barley.
• December corn dropped under the 10-day moving average at $6.83 1/4 after rising overnight to $6.98 1/2, the contract’s highest intraday price since a 2 1/2-month high of $6.99 1/2 on Sept. 12.

Soy complex futures are lower, led by declines of 8 to 12 cents in soybeans and a drop of nearly $4 in soymeal; soyoil is around 40 points lower.

• Soybean futures faded from overnight gains on corrective selling and increased competition from South American supplies.
• Argentine farmers continue to offload soy stockpiles following a series of measures aimed at spurring exports. The country’s ag ministry said 62% of the 2021-22 harvest was sold by the end of last week.
• India’s palm oil imports in 2022-23 could jump 9% from a year earlier on a rise in domestic consumption and as competitive prices allow the tropical oil to regain its share in the world's biggest market, a Reuters survey showed.
• November soybeans faded after rising in overnight trade to $14.88 3/4, the contract’s highest intraday price in a week. Initial support comes in at the 10-day moving average around $14.53.

Wheat futures are firmer, with HRW and SRW mostly 6 to 9 cents higher and spring wheat 4 to 5 cents higher.

• Winter wheat futures overnight hit the highest levels in 2 1/2 months on concerns an intensifying Russia-Ukraine war will disrupt grain shipments from the Black Sea region. Prices turned lower early in daytime trade but have firmed again, though they are well off their overnight highs.
• Supply concerns given heightened tensions between Russia and the West are price-supportive.
• Ukraine’s 2023 wheat crop may decrease to 16 MMT to 18 MMT, down from 19 MMT this year, due to an expected fall in the winter wheat sowing area, an ag official said Tuesday. Ukrainian ag officials have said the area under winter wheat could fall by at least 20% due to Russian occupation.
• The Philippines tendered to buy 45,000 MT of optional origin feed wheat.
• December SRW wheat overnight pushed above the 200-day moving average around $9.14 1/2 and reached $9.19 1/2, the contract’s highest intraday price since $9.54 on July 11. December HRW futures hit $9.82, also the highest price since July 11.

Live cattle futures are mixed at midmorning, while feeder cattle futures are firmer.

• Nearby live cattle futures faded after finding little followthrough buying interest from Tuesday’s climb to seven-year highs. Weakness in wholesale beef is weighing on the market as traders wait for cash trade to establish.
• Feeder cattle are drawing support from weakness in corn futures.
• Choice beef cutout values dropped 81 cents Tuesday to $251.64, the lowest level since April 2021. While the Choice/Select spread is unusually wide due to tight Choice supplies, falling wholesale prices suggest packers are cutting prices to attract retailer buying.
• USDA’s Cattle on Feed Report Friday is expected to show feedlot placements in August fell 2.7% from the same month last year, based on a Reuters survey. The anticipated decline would mark the sixth month out of eight this year that feedlot placements decline versus year-ago levels.
• October live cattle are trading inside Tuesday’s range. Initial resistance is seen at Tuesday’s high of $146.775, the highest intraday price since the contract high of $147.50 posted April 22.

Hog futures are slightly lower.

• Hog futures fell to the lowest levels in a week as the market extended Tuesday’s weakness despite signs of a firming of cash fundamentals.
• While the CME lean hog index is down 6 cents to $98.36 (as of Sept. 19), strength in the direct market signals cash prices are still underpinned over the near-term.
• Pork cutout values fell 70 cents Tuesday to $105.18 on strong movement of 347 loads.
• October lean hogs fell as low as $95.20, the contract’s lowest intraday price since $94.60 on Sept. 14. The nearby contract held support at the 40-day moving average around today’s low.