CORN
Corn futures continued to push into new highs for the move overnight led by old crop contracts. March advanced 7 cents to a new contract high of 5.70-3/4 ahead of today’s anticipated adjustments to monthly corn stocks data from USDA. The February Supply/Demand report will be released at 11 AM CT. Dec corn rose 3 cents to 4.61-1/4. The contract high forged after the January Crop report is etched at 4.65-1/2 for the new crop contract. Trade estimates for corn carryout are averaging near 1.392 bil bu compared to the last USDA estimate of 1.552. Private forecasts are coming in lower. Trade estimates for Argentina’s corn crop is near 47.0 mmt versus USDA’s 47.5. Brazil’s crop is estimated near 108.4 versus 109.0. In addition to the bullish mood coming from an expected tightening of the monthly balance sheet, the dollar is down sharply which is a bullish development for exportable commodities. Increasing Chinese imports and capital speculation have boosted international corn prices, lending further support to the domestic market. Heading into today’s last night’s higher trade, Managed Money was estimated to be net long 394,000 corn contracts.
SOYBEANS
Soybean futures were higher overnight, posting double digit gains on follow-through buying tied to yesterday’s breakout to the upside. March beans tacked on 15 cents to 14.02-3/4 versus the Jan 13 high of 14.36-1/2. Nov beans, overnight rallied as much as 14-3/4 cents to 11.94-1/2, 2-1/2 cents shy of that contract’s post-Jan report contract high of 11.97. Soymeal futures are still somewhat rangebound with a bullish tilt, and soyoil made new highs overnight. Trade estimates for Today’s USDA U.S. 2020-21 soybean carryout is averaging 123 mil bu versus USDA last month’s 140 bil bu number. Concerns over harvest progress in Brazil and increased taxes in Argentina is helping boost the bean complex. 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’s last 133.0 figure. Heading into today’s last night’s higher trade, Managed Money was estimated to be net long 185,000 soybeans; 75,000 lots of soymeal, and; 119,000 soyoil.
WHEAT
Winter and spring wheat futures were narrowly mixed overnight as the trade awaits the February USDA report. Prices are viewed as neutral from a technical standpoint, but should stay supported by neighboring row crop prices, a 31 point pullback in the dollar, and a rather lengthy cold snap in the Plains that may threaten winter wheat ground unprotected by snow cover. Trade estimates for U.S. 2020-21 wheat carryout is near 834 mil bu versus last month’s 836. The trade also estimates World wheat carryout near 312.8 mmt versus USDA 313.1. Heading into today’s last night’s mixed trade, Managed Money was estimated to be net long 26,000 contracts of SRW wheat.
CATTLE
Cattle futures are called steady to firmer in keeping with the trend. Live cattle faded off morning highs yesterday, but April through August established new contract highs. Some caution is warranted due to an overbought technical condition of the market and yesterday’s settlement well off the new highs. Cash trade is undeveloped, and will likely hold off until the end of the week, but with carcass values strong and cold weather, we expect the trend to be higher. Choice carcass held midday gain, finishing up 1.62 to $236. A solid load count was noted at 114 loads. Strength in the feed-grain markets will put pressure on the feeder market, and could keep resistance on the cattle complex in general.
HOGS
Lean hog futures are called higher on follow-through buying and other factors. The complex (except Feb) forged new contract highs to begin the week aided by cold temperatures supporting the cash market. The premium of Feb to the index is seen pressuring Feb hogs ahead of expiration at the end of the week. Meanwhile, talk of multiple disease concerns in the Chinese herd will keep them active in U.S. export market into 2021, thus supporting buying optimism. Carcasses traded .69 higher on the close to $84.87 with a load count 290 loads reflective of the demand tone. High grain prices high will limit production helping the rally.
Author
Matthew Strelow