Market Snapshot | September 30, 2022

Corn futures are higher with soybeans and wheat as Russia’s plans to annex four regions of Ukraine fuels concerns over disruptions to global grain supplies.
USDA’s Grain Stocks Report and Small Grains Summary will be released at 11 a.m. CT. Traders expect Sept. 1 corn stocks totaled 1.512 billion bu., up from 1.235 billion bu. on the same date in 2021.
Low river levels and soaring barge freight rates are curbing U.S. grain exports. Numerous barges have run aground on the lower Mississippi River and grain barge shipping rates are soaring to historic highs this week, Reuters reported.
Ian, now a hurricane again, is expected to make landfall again near Charleston, South Carolina around 1 p.m. CT. The storm is expected to weaken quickly once over land, but it will not completely dissipate until Saturday afternoon. Some crop damage is possible.
South Korea purchased 60,000 MT of corn likely to be sourced from South America or South Africa.
December corn futures extended overnight gains to top Thursday’s high and the 20-day moving average to reach $6.83 3/4, the highest level in a week. The contract is up from $6.76 3/4 at the end of last week.

Soybean futures are firmer as strength in grain markets overshadows weakness in crude oil and a sharp drop in Malaysian palm oil this week.
USDA is expected to report Sept. 1 U.S. soybean stocks at about 242 million bu., down from 257 million bu. a year earlier.
Malaysian palm oil futures rose 2.3% today but still dropped 8.5% for the week on concerns over weaker demand.
November soybeans extended overnight gains and pushed above Thursday’s high and the 50-day moving average at $14.22 to hit $14.25 3/4, matching last week’s close. Initial resistance is pegged at the 200- and 40-day moving averages at $14.27 3/4 and 14.29, respectively.

Winter wheat rose for the third time in four sessions on concerns over Black Sea disruptions and prospects that persistent dryness in the U.S. Plains will hamper crop establishment.
USDA is expected to report Sept. 1 U.S. wheat supplies totaled 1.776 billion bu., up slightly from 1.774 billion bu. a year earlier.
USDA will also issue its final production estimates for this year’s U.S. wheat crop. All wheat production is expected to come in at 1.778 billion bu., up 5 million bu. from August, with just minor adjustments to the wheat classes.
Russia’s wheat export tax for Oct. 5-11 will be 2,119.0 rubles ($37.16) per MT based on an indicative price of $308.10. That’s down from a rate of 2,476.6 rubles per MT the previous week and the eighth straight weekly decline.
China set the 2023 minimum purchase price for wheat at 2,340 yuan ($329.69) per MT, an increase of 40 yuan (1.7%) compared with this year.
The Philippines purchased 50,000 MT of Australian feed barley but passed on a tender to purchase up to 60,000 MT of feed wheat. Algeria purchased between 150,000 and 200,000 MT of milling wheat that’s likely to be sourced from Russia and is continuing negotiations on more purchases.
December SRW wheat reached $9.17, topping Thursday’s high and meeting resistance at the 200-day moving average around $9.17 3/4. The contract is poised for a strong gain for the week after ending last week at $8.80 1/2.

Live cattle and feeder cattle are lower at midmorning.

Live cattle futures generated limited followthrough buying from Thursday’s rebounded and faded under pressure from weakness in feeder cattle and the cash market.
Feeder cattle are being pressured by strength in the corn market.
USDA-reported live steers averaged $144.51 through Thursday morning, down from last week's $144.94 average. Cash volume this week appears sufficient that showlists were virtually cleaned up, paving the way for potentially steady/firmer cash prices next week.
Choice beef cutout values fell $1.47 Thursday to $246.08, an 18-month low, though movement was again strong at 150 loads.
December live cattle earlier reached $148.375, the highest intraday price in a week, before fading and dropping below the 100-day moving average at $147.695. The contract ended last week at $148.55.

Hog futures are moderately higher.

Lean hog futures are higher after USDA’s Hogs & Pigs Report Thursday indicated U.S. producers contracted herds more than expected.
USDA estimated the U.S. hog herd at 73.8 million head as of Sept. 1, down 1.4% from the same date in 2021 and larger than expectations for a 0.8% drop. Hogs kept for breeding as of Sept. 1 totaled 6.152 million head, down 0.6% from 6.19 million head a year earlier and also a larger drop than expected. The marketing herd at 67.648 million head fell 1.029 million head (1.5%). All three categories were the smallest inventories since 2017.
The CME lean hog index is down 45 cents to $95.14 (as of Sept. 28), the lowest since Feb. 16. October futures are currently about $5.00 under the index, a sharp weakening from about $1.50 two weeks ago.
Pork cutout values fell $1.97 Thursday to $98.80, the lowest daily average since May 12. Movement was strong at 343 loads.
December hogs rose as high as $77.20 but are still down sharply from $82.80 at the end of last week and remain near a nine-month intraday low at $75.325 posted Wednesday.

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