CORN

Corn futures were up 6 to 7 cents overnight after a third straight day of weakness.  Rains in Argentina and Brazil have helped stabilize crops there, but strong demand for grains and oilseeds combined with a lower dollar is giving prices a boost into the end of this holiday-shortened week of trading.  Weekly Ethanol Stats will be out today, Exports tomorrow.  March corn, at 5.28-1/4, is respecting its 10-day moving average support drawn at 5.19, and has seen a bearish target reached in the form of the closed gap on the daily chart from last week.  This may help allow prices to rise and test contract highs.  Informa will be out this morning with new estimates of U.S. 2021 planted acres by crop based on a recent survey.  They have been using a U.S. 2021 corn planted acreage of 91.7 million versus 91.0 last year and 89.7 in 2019, with a trend yield of 181.0 versus 175.8 last year and 167.5 in 2019.

SOYBEANS

Soybean futures traded higher overnight, posting gains of 10 cents in old crop.  March beans are near 13.80 after trading a 30 cent range of 13.52 to 13.84 yesterday.  Nov beans are up 2 to 11.74.  Managed funds were net sellers of 8,000 soybeans; 6,000 soymeal and buyers of 3,000 soyoil.   They are now net long an estimated 136,000 Soybeans;  73,000 lots of soymeal and 88,000 soyoil.  Final crops in South America should still come in below USDA’s last estimate despite recent moisture in more than half the growing region.  This could still increase U.S. soybean exports and lower US 2020/21 carryout.  Informa will release their latest production estimates using a U.S. 2021 soybean planted acreage of 89.1 million versus 83.1 last year and 76.1 in 2019.  They are using a trend yield of 52.0 versus 50.7 last year and 47.4 in 2019.

WHEAT

Winter wheat futures were firm overnight led by a rebound in row crops and 20+ basis point drop in the greenback.  Winter wheat is up 2 to 4 cents, as is Mpls Spring wheat.  Wheat prices are in limbo and consolidating as the trade exhibits concerns over slow Covid inoculations that could slow the U.S. economic recovering.  The new U.S. POTUS wants to inoculate 100 million Americans in next 100 days.  Some feel that could be key to food and fuel demand.  Informa will be out this morning with new estimates of the U.S. 2021 planted acres by crop based on a recent survey.  There is talk US spring wheat farmers could reduce acres due to higher corn and soybean prices versus wheat.  The firm will also update U.S. 2021 crop production using a U.S. 2021 wheat planted acreage of 45.5 million versus 44.3 last year and 45.0 in 2019 and a trend yield of 49.5 versus 49.7 last year and 52.0 in 2019.  Overnight tender activity had Turkey seeking 400,000 tons of optional-origin wheat; Japan bought 2,000 tons of U.S./Canadian wheat; Jordan bought 120,000 tons of optional wheat; And, Algeria bought 390,000 tons of optional origin wheat.

CATTLE

Cattle futures are called mixed.  The market was mostly lower on Wednesday as cash trade began to develop in the Fed cattle Exchange with values from $110.50 to $111/cwt.  Countryside cash started at $110, mostly steady with last week.  We view the market as unstable as traders look ahead to tomorrow’s Cattle on Feed report. Expectations are: On Feed at 99.5%, Placed at 97.1%, Marketed at 100.6%.  Technically, April cattle charts paint a gradual strengthening pattern butting up against resistance for the week.  The April live cattle contract holds the bulk of open interest in the complex and, at yesterday’s high of 120 may need positive cash news or a friendly cattle on feed report to push through. 

HOGS

Lean hog futures are called steady to firmer.  Front month contracts reversed yesterday and recaptured Tuesday’s losses, improving the outlook for today’s trade.  However, cash hog markets are mixed with heavy slaughter at 498,000 head and carcass weights holing 5 to 6 pounds over last year, keeping production heavy.  Pork carcasses finished the day 1.60 higher to 79.02, off from strength at midday with a good load count at 359 loads.  The Lean hog index closed .36 higher to 65.92 while flattening out, reflecting a flat cash market.  Despite the improved hog herd, Chinese pork prices remain very strong keeping demand support into the market.

Author

Matthew Strelow