CORN
Corn futures traded mostly unchanged overnight. May corn is up 2 cents to 5.48-1/2 and up about a dime for the week. USDA did announce sales of 696 metric tons mid-week bringing China’s commit to a record large 22.4 mmt. The trade though now believes this round of Chinese buying has been completed. Dec corn is unchanged at 4.68 this morning and down a dime for the week as NOAA April weather forecasts call for above normal temps and below normal rain contributing to ideas of early corn planting. The combination of better U.S. and South American weather may contribute to more long liquidation by the managed funds who have been holding a hefty long position. In Argentina, last evening’s GFS model run showed a notable reduction in rainfall across the southern half of the nation March 26 – 30. In Brazil, much of the nation is still expected to trend drier into next week with the exception of the far south. This will still benefit soybean harvesting and Safrinha corn planting. The next key USDA report is the March 31 Acres and Stocks report.
SOYBEANS
Soybeans traded 5 higher across the board overnight putting nearby May at 13.97-1/4 and Nov at 12.11-1/4. May is down 15 cents for the week while trying to maintain a sideways trend at 50-day moving average support. Nov broke out to the downside yesterday and is now targeting its 50-day moving average support seen at 11.93 after losing 35 cents this week. Thursday’s price drop was linked to the decline in Dalian futures, crude oil and in world vegetable oil prices. Today, Chinese Ag futures (May) settled down 20 yuan in soybeans, down 16 in Soymeal, down 164 in Soyoil, and down 96 in Palm Oil. Malaysian palm oil prices were down 72 ringgit at 3,727 (basis June) at midsession on higher supply outlook. In the U.S., NOAA’s April forecast for above temps and below normal rain could suggest early planting, thus offering price resistance.
WHEAT
The winter wheat complex was choppy overnight leaving prices mixed this morning. Prices are taking a path of least resistance now that bullish market forces are waning as weather and a higher dollar favor the bears at this time. May CBOT wheat, at 6.33-1/4, has developed into a solidly lower trending pattern the past three weeks since testing contract highs on February 24. The contract is down a nickel for the week while now oscillating around it’s 100-day moving average support area. May KC is flat with Thursday’s settlement price of 5.87 while having given up 16 cents this week. Yesterday’s selling sent the contract price below it’s 100-day MA which is now resistance at 5.99. May Mpls wheat is up as much as a nickel in the July contract to 6.38-1/2 as the market garners support from a potential loss of planted 2021 acreage. Last evening’s GFS model run made an increase in the eastern half of the Northern Plains March 26 – 28. Some rain and snow will be possible. The Northern Plains continues to be in need of a more widespread meaningful precipitation event due to ongoing drought conditions. In overnight tender activity, Tunisia bought 42,000 tons of optional-origin durum wheat and 117,000t soft wheat; South Korea bought 38,000 tons of U.S. wheat.
CATTLE
Cattle calls are steady to lower following a round of strong selling pressure. Cash trade is mostly done for the week on a steady to higher tone with last week. Bids have stayed firm and some trade occurred in Iowa at $116/cwt yesterday afternoon. The futures market was holding a strong premium to the cash market, and that was some of the reason for the strong selling pressure in deferred contracts. Choice carcasses have been trending higher this week, and gained .14 yesterday to 228.61, and Select was .52 firmer to 218.11 with moderate demand at 121 loads. Futures prices may stay choppy and going into the Cattle on Feed report on Friday. Trade estimates are for total cattle on Feed as of March 1 at 101.4%, Placements at 97.6%, and Marketings at 98.1% of last year’s totals.
HOGS
Hog calls are mixed this morning. Hog futures fell with the rest of the commodity markets yesterday on profit taking and long liquidation. The market is over-bought and due to have some premium taken out. The April contract is being supported by the strong cash market and retail demand. USDA weekly export sales for pork stayed supportive. New net sales of 39,700 MT reported for 2021 were up 23% from the previous week and 5% from the prior 4-week average, with Mexico, China, and Japan as last week’s top buyers. The lean hog index gained an additional .65 to 90.56. Hog slaughter has been running under last week by about 4-5,000 head, and yesterday’s estimated kill was 492,000 head. The tighter supply, given the strong demand helps support the cash market. Prices were softer despite Midday carcass values surging 8.14 higher to 108.91. The market held those gains, finishing 6.00 higher to 106.80, on demand of 244 loads. The strong retail close should help support prices today.
Author
Matthew Strelow