CORN

Corn futures were down 8 cents overnight in nearby March corn, 4 in Dec after posting bearish reversals in Tuesday’s trade.  March fell back to the contract’s 10 day moving average support found at 5.48-1/4.  Though still trending higher, prices look to begin a consolidation phase after rallying into the February USDA monthly Supply/Demand report.  Many traders were left scratching their heads after USDA dropped U.S. corn carryout only 50 mil bu while raising China’s corn imports and at the same time, raised China’s corn end stocks.  The ledger did little to reflect where the market is as far as U.S. supply and where prices need to trade to ration demand.  For the most part, the corn stocks outlook was higher than expected, leading to a retreat in the nearby March contract that had hit a 7-1/2-year high ahead of the report’s release.  The next downside target for March is 5.28-3/4.

SOYBEANS

Soybean futures were down 8 to 9 cents across the board overnight.  Meal and soyoil also traded lower.  Bean prices did manage to close in the upper half of yesterday’s trading ranges on Tuesday, but due, in part to reaching overbought levels, the complex failed to see follow-through strength overnight.  Many of USDA’s February numbers were close to pre-report estimates, however, South America’s numbers did not reflect much change.  Minor revisions to U.S. export data also disappointed the trade.  March beans begin the day oscillating around what may become a pivotal price area at $14.00 going into the weekend and next week’s annual USDA Ag Forum.   Nov beans are at 11.82 with a contract high from January 19 etched up at 12.03.  All bean contracts are trading above their respective 10 and 20-day moving averages signaling a return to a stronger near-term trend.  Weekly Export Sales are on tap for tomorrow.  Overnight export tenders included Egypt seeking 30,000 tons of optional soyoil, and 10,000 tons of sunoil.

WHEAT

Winter and spring wheat futures were lower overnight led by a 9 cent loss in March Chicago wheat to 6.40-1/2.  Pennants are forming on the daily SRW wheat charts which signal on outlook for more consolidation that will eventually lead to a break-out in either direction.  Tighter-than-expected world ending stocks, as outlined in yesterday’s USDA balance sheet is supportive.  However, weakness in the corn market will limit buying enthusiasm ahead of the weekend.  Resistance from an increase in Russian farmer selling and an uptick in available offers for exports there is also noted.  March KC wheat lost 7-1/2 cents to 6.26 and March Mpls spring wheat was down 3-1/4 cents to 6.23-1/4.  In overnight tender activity, Japan bought 86,845 tons of U.S./Canadian wheat in a routine purchase;  Philippines bought 240,000 tons of optional-origin feed wheat.

CATTLE

Cattle futures are called steady.  The cattle charts saw some softening at the end of the session yesterday and may be vulnerable to some technical weakness this morning.  Cash is still undeveloped with expectations for higher trade.  This will likely lead the cattle market’s direction into the end of the week.  Asking prices are up at $116 to $117/cwt.  The weekly Fed Cattle Exchange will begin at 10 AM Central today.  Carcass values finished mixed yesterday with choice losing 1.91 to $234.29.  Good movement was noted at 129 loads.  Weakness in feed prices will support Feeder prices on the open this morning.  The trend is still higher, but the market may be poised for some retreat after April and June posted topping signals on daily charts yesterday, bringing caution after the strong move higher.

HOGS

Lean hog futures are called steady to higher.  February hogs expire on Friday and are holding a 2.200 premium to the index, which may limit the upside.  The index traded higher yesterday gaining 1.13 to 70.40, reflecting cash strength supported by cold temps across the Midwest.  Front months consolidation a little on Tuesday, and may be due for a pause and/or susceptible to some correction.  Deferred hogs are still showing strength after posting new contract highs again on Tuesday.  Demand and carcass values stay supportive gaining .49 on Tuesday while trading at 85.39 with a load count of 368 loads.  Chinese/export demand optimism helps support the deferred contracts.

Author

Matthew Strelow