GRAIN CALLS
Corn: 17 to 23 cents lower.
Soybeans: 32 to 41 cents lower.
Wheat: 33 to 47 cents lower.
GENERAL COMMENTS: Grain and soybean futures tumbled on profit-taking overnight after soaring Thursday following Russia’s invasion of Ukraine, with soybeans under followthrough pressure from a weak close yesterday. Malaysian palm oil futures plunged 7% but posted the best week since October. Front-month Nymex crude oil futures are lower this morning after two-sided trade overnight. U.S. stock index futures suggest a slightly firmer open and the U.S. dollar index is more than 300 points lower.
Traders will continue to watch Russia’s invasion of Ukraine. Russian forces captured the Chernobyl power plant north of Kyiv, site of the 1986 nuclear disaster. The White House noted credible reports that Russian soldiers were holding staff at the nuclear site as hostages. Explosions were reported in Kyiv, Kharkiv and elsewhere. But reports signal Russia has agreed to talks with Ukraine.
USDA Secretary Tom Vilsack said the U.S. biofuels industry has a “bright, positive future,” especially in the burgeoning market for sustainable jet fuel. “We’re going to continue to look for ways to promote this industry, but we’re also excited about the grand challenge to focus on the aviation industry that currently wants, needs biofuel,” Vilsack said Thursday at USDA’s Ag Outlook Forum.
USDA’s Animal and Plant Health Inspection Service (APHIS) has confirmed the presence of H5N1 highly pathogenic avian influenza (HPAI) in two commercial turkey flocks in Greene County, Indiana, and in backyard flocks in Kalamazoo County, Michigan (mixed species, non-poultry) and Knox County, Maine (pet chickens, non-poultry), the second confirmed backyard find in Maine. There are now seven confirmed commercial operations with HPAI in Indiana, Delaware and Kentucky, and five backyard flocks in Virginia, Maine, New York and Michigan.
Taiwan passed on a tender to buy up to 65,000 MT of corn due to offered prices being too high.
CORN: USDA reported net 2021-22 U.S. corn sales of 1.041 MMT for the week ended Feb. 17, up 27% from the previous week and up 4% from the average for the previous four week. Exports of 1.886 MMT, a marketing-year high, were up 17% from the previous week and up 41% from the four-week average. Sales surpassed trade expectations ranging from 500,000 to 900,000 MT.
SOYBEANS: Net weekly 2021-22 soybean sales totaled 1.233 MMT for 2021-22, down 6% from the previous week and down 1% from the prior four-week average. Top buyers included Egypt (379,300 MT, including 50,000 MT switched from “unknown destinations”) and China (291,400 MT, including 172,000 MT switched from unknown destinations and decreases of 1,100 MT). Sales for 2022-23 totaled 866,500 MT, including 601,000 MT to China and 192,000 MT to unknown destinations. Exports of 1.26 MMT were up 8% from the previous week but down 5% from the prior four-week average. Sales topped trade expectations ranging from 500,000 MT to 1.2 MMT.
USDA also reported daily soybean sales of 334,000 MT to China for 2022-23 and 285,000 MT to unknown destinations – 159,000 MT for 2021-22 and 126,000 MT for 2022-23. Today’s sales were the latest in a four-week string of purchases. Since Jan. 28, USDA has reported a combined 4.399 MMT of soybean sales to China or unknown destinations. By comparison, over the month prior to Jan. 28, sales to China and unknown destinations totaled just 648,000 MT.
WHEAT: Net weekly U.S. wheat sales totaled 516,900 MT for 2021-22, more than four times the previous week’s sales and more than double the average of 234,242 MT for the previous four weeks. Net sales for 2022-23 totaled 169,200 MT. Sales were expected to range from 100,000 to 450,000 MT for 2021-22 and zero to 100,000 MT for 2022-23.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures are likely to see followthough pressure from yesterday’s sharp declines, which prompted packers to pull back cash cattle bids. Some feedlots, fearing even further reductions in cash bids, sold cattle at the lower prices. Other feedlots did not sell, meaning some of this week’s showlist could be carried into next week if there aren’t more sales today. USDA-reported live steers averaged $143.94 this week through yesterday morning, $1.58 above last week’s average, but volume has been light ahead of USDA’s Cattle on Feed Report. Choice grade beef cutout values fell $1.64 yesterday to $259.24, the lowest daily average since early April. Movement was strong at 170 loads.
Net weekly U.S. beef sales totaled 14,500 MT for 2022, down 37% from the previous week and down 25% from the prior four-week average. April live cattle fell $2.45 yesterday to $142.30, the lowest closing price since Jan. 27. April feeder cattle fell $4.475 at $163.80, a two-month low.
Traders expect USDA’s Cattle on Feed Report this afternoon to show Feb. 1 feedlot supplies up 0.8% from year-ago at roughly 12.2 million head. After bigger-than-year-ago placements the three previous months, the figure for January is expected to be down 0.8% from year-ago. But traders expect last month’s marketings to have fallen 2.7% from last year.
HOGS: Lean hogs may face carryover technical pressure today after a bearish key reversal Wednesday was followed by further weakness yesterday, signaling a market peak may have been established. Additional pressure today would swing short-term momentum solidly to bears and point to a deeper correction extending into next week. Cash fundamentals remain firm but are showing signs of topping. Pork carcass cutout values jumped $5.01 yesterday to $114.13, led by a gain of over $13 in primal hams. Movement totaled about 266 loads. The CME lean hog index is down 12 cents to $98.04, its first decline since Jan. 19. April lean hog futures fell $2.50 yesterday to $105.525, the lowest close since Feb. 16.
Net weekly U.S. pork sales totaled 26,600 MT for 2022, up 45% from the previous week, but down 8% from the prior 4-week average.
China’s sow herd fell 0.9% during January to 42.9 million head, though that was still up 2% from last year, according to the country’s ag ministry. The country’s hog slaughter totaled 28.5 million head during January, down 1.7% from December, but up 45.9% from last year.