CORN

Corn futures were unchanged overnight in light trade volume ahead of the weekend and next Tuesday’s USDA report.  March corn is settling in at 5.50 after closing well off of yesterday’s high.  For the week, March corn has traded a range between 5.36-1.2 and yesterday’s new contract high of 5.58.  Dec corn is at 4.50 versus this week’s trading range from 4.43 to 4.54.  The market remains supported into the weekend by record weekly export sales of 7.4 million metric tons.  Trade estimates for U.S. 2020/21 corn carryout on Tuesday is nearing 1.392 bil bu versus USDA’s last estimate of 1.552.  Trade estimates for Argentina’s corn crop is near 47.0 mmt versus USDA 47.5.  Brazil’s crop is estimated near 108.4 versus USDA 109.0.  USDA’s Ag Attaché estimated the crop near 105, and Brazil’s Agriculture Minister confirmed the government expects to harvest bumper soybean and corn crops in spite of planting and harvesting delays in 2020.  The market will need to lower USDA numbers to keep pushing futures higher.  However, in the meantime, U.S. domestic buyers are struggling to source summer corn needs.

SOYBEANS

Soybean futures were mixed overnight within their sideways two-week trading ranges as bullish momentum takes a breather.  March beans are at 13.74 and adhering to 10 and 20-day moving averages.  Nov beans are at 11.61.   For the week, March is unchanged and Nov is up about 12 cents.  Trade estimates for Tuesday’s USDA U.S. 2020/21 soybean carryout is averaging 123 mil bu versus USDA last month’s 140 bil bu number.  Trade estimates for Argentina’s soybean crop is near 47.6 mmt versus 48.0;  Brazil’s crop is estimated near 132.4 versus USDA 133.0.  Weather-wise:  Net drying will still occur in much of Argentina through next Thursday.  There will be some increase in erratic shower and thunderstorm activity for Monday through Thursday; though, this is likely to favor the northwest.  In Brazil, conditions will still be favorable for crops in most of the nation.

WHEAT

Wheat futures were mostly unchanged overnight with Chicago nearby contracts up 2 to 3 cents and KC & Mpls unchanged.  For the week, SRW contracts are about 25 cents off of Monday’s intra-day high.  KC HRW wheat is trading 35 cents lower than Monday’s high.  Both winter wheat markets are back below their respective 10 and 20-day moving averages while facing some pressure from a higher dollar that is stabilizing this morning, down 35 basis points.  It’s the same story for Mpls spring wheat which is down about 15 cents from Monday’s high.  Trade estimates for U.S. 2020/21 wheat carryout on Tuesday is near 834 mil bu versus USDA 836.  World wheat carryout is expected to near 312.8 mmt versus USDA 313.1.  Meanwhile, this week’s new headlines from Russia stating, “The situation in the global food market is unfortunately worsening,” according to Putin, included rhetoric surrounding a need to prepare a mechanism to support grain producers.  Russia is accelerating plans to switch to a formula-based tax on wheat exports, the economy minister said on Thursday, as Moscow strives to curb food inflation in the COVID-19 pandemic.  Russian producers may be trying to sell additional inventory ahead of the added export tax.

CATTLE

Cattle futures are called higher led by good demand and cold weather concerns fueling strong technical buying.  February option expiration is today and First Notice Day on Monday will likely usher in some extra volatility.  June futures pushed over last Friday’s reversal and April is challenging that level.  Cash markets are still developing with light trade seen just under $114/cwt, trending higher than early in the week and $1-2 over last week.  Packers are holding bids at  $112 versus $115 asking prices.  Yesterday’s beef export sales were very good at 29,800 MT; China bought 7,000 MT.  Boxed beef was 1.03 lower on Choice to, but movement was very good at 132 loads, marking the largest of the week.

HOGS

Lean hog futures are called steady to higher.  The $11 discount of the cash index to futures, compared to the normal $2 margin may create some choppiness early, particularly following yesterday’s outside trading ranges that saw prices close lower after making new contract highs.  This could provide instability as traders opt to liquidate some of their long positions ahead of a frigid forecast.  Demand remains supportive led by China’s involvement.  Export sales hit 46,300 MT.  Retail carcasses also finished 5.60 higher to 85.83 on 289 loads.

Author

Matthew Strelow