CORN

Corn futures were down overnight, slumping below 10 and 20-day moving averages in the May contract on losses of as much as 7-3/4 cents.  Dec corn reached a 1-1/2 week low of 4.63-3/4 before recovering some of those losses.  Prices are looking toppy for the new crop contract as upward momentum stalls ahead of next week’s March Supply/Demand report where many believe the agency may not make a lot of changes to U.S. 2020/21 corn, soybean and wheat balance sheets.  Strength in the dollar and weaker crude prices may also be reducing the money flow in corn lately.  Down south, the Texas corn crop was 3% planted, behind the state’s five-year average of 7%, according to USDA.  Overnight, Taiwan bought 65,000 tons of Argentinian corn.

SOYBEANS

Beans were choppy overnight with a weaker bias after losing traction yesterday.  May beans are down a nickel this morning to 13.86-1/4 with an overnight range carved out between 13.95-3/4 and 13.80-3/4.  Nov beans matched Friday’s intra-day low of 12.08-1/2 while staying close to the contract’s upward-trending 10-day Moving Average.  Farther below, the 20-day is serving as a next support level at 11.91-1/4.  Momentum studies have reversed lower in the complex which could reinforce a further set-back.  Technically, beans have a long ways to correct lower without breaking the long-term bullish cycle.  In South America, Brazilian farmers had harvested 25% of the area planted with soybeans as of Feb. 25, a jump of 10 percentage points from a week earlier but still behind the 40% harvested on the same date a year ago, according to agricultural consultancy AgRural.  However, the 25% figure was still the lowest for the date since the 2010-2011 growing season.  AgRural last week raised its forecast for soybean production for the current crop year to a record 133 million metric tons, from its previous forecast of 131.7 million tons.

WHEAT

Winter wheat futures managed modest gains overnight despite weakness in neighboring row crops and a weaker dollar.  May Chicago and KC contracts traded 5 higher to 6.55-1/4 and 6.28-1/4, respectively as 50-day Moving Average support halts the 4-day price drop.  The ‘turnaround Tuesday’ price rebound is likely corrective in nature after prices retreated from last week’s rally, but aided by friendly crop ratings.  The USDA’s National Agricultural Statistics Service in a weekly crop report on Monday rated 37% of the Kansas winter wheat crop in good-to-excellent condition, down from 40% a week earlier.   Topsoil moisture in the top growing state was short-to-very short in 42% of the state, steady with the previous week.  For Texas, the No. 2 winter wheat state by planted area, the USDA rated 28% of the crop as good-to-excellent, down from 30% the previous week.  For Oklahoma, the USDA rated 46% of the winter wheat crop in good-to-excellent condition, down from 48% a week earlier.  May MPLS wheat traded 7-3/4 cent range between 6.30-3/4 and 6.38-1/2 overnight and was last up 4-1/2 cents to 6.38.  That contract’s 50-day moving average resides at 6.25-1/2 and hasn’t been touched since December 22nd.  In Tender activity,  Japan seeks 82,937 tons of optional-origin wheat, Algeria seeks 50,000 tons of optional-origin wheat; And, Pakistan seeks 300,000 tons of optional-origin wheat.

CATTLE

Cattle calls are steady to lower as front month charts weaken and large cattle supplies weigh on the market.  The steady cash market is resulting in front-months losing the premium to cash.  We look for cash to stay quiet until the end of the week.  Retail carcass slipped on the close yesterday, Choice carcasses were down 1.50 to 239.03 and Select down 2.09 to 227.63.  Product movement was moderate at 85 loads.  If carcasses turn softer, it will only keep selling pressure on the market.  Cash trade was undeveloped to start the week. Last week was steady at $114, expectations are for steady to slightly higher again this week.  Feeder cattle markets are testing key support levels on the front end, pressured by weakness in the cattle market that looks to have hit oversold and value territory with carcass values running 16.5% over last year, on overall good demand.

HOGS

Lean hog calls are mixed.  Though prices were firmer on Monday, price action traded within Friday’s range, and looked like consolidation as the upward momentum in the front months slowed into the end February.  Cash markets remain extremely strong and the Lean Hog Index gained and additional .75 to 80.70 to reflect the strong trend. The index still trading at a 7.025 discount to the April futures.  Retail values slipped on Monday, softening from midday strength finishing 1.47 lower to 92.37 on 313 loads.  That may pressure pries on the market open.  However, overall hog product values are strong trading above the $90 level, and movement has been good at these prices, keeping support in the hog market.

Author

Matthew Strelow