CORN
Corn futures were weaker overnight. May corn shed 11 cents to 7.51-1/2 weighed down by a $5.75 drop in crude oil. Dec corn was down 3-1/4 cents to 6.52. Grains traded higher overnight on news of
Russia asking China for military aid, and continued concern about the amount of wheat, corn and sunoil that will be shipped from Russia and Ukraine as the War continues. Then, talk of a new ceasefire helped guide prices lower. Dalian corn futures were lower. The dollar is lower and stock index futures are up 375 points. The U.S. Fed will meet this week to address interest rates where a 25 basis point hike is likely. Many feel they should be more aggressive with U.S. inflation highest in 40 years.
SOYBEANS
Soybean futures were mixed overnight with a higher bias. Prices are slumping to their overnight lows this morning with May beans down a penny to 16.75, and November down 8 to 14.83. The next area of resistance for May beans is around 17.06-1/2 while prices, for now, appear to be looking test support at the 16.66 area. Last night’s trading range was 16.97-3/4 down to 16.70-1/2. May meal is up 4.50 to 4691.10; soyoil is down 1.30. Dalian soybean, soymeal, palmoil and soyoil futures were all lower. On Friday, Managed funds were net buyers of 4,000 soyoil, and sold 3,000 soybeans and 3,000 soymeal. The are now estimated to be long 168,000 soybeans, 97,000 soymeal and 86,000 soyoil. Weekly Export Inspections will come out mid-morning. Over the weekend, China’s crackdown on increased Covid cases raised concern about their domestic demand and imports. China locked down a key port city of Shenzhen. Shenzhen is also a key tech production city that is a key producer for Apple. China is also cracking down on money laundering cases.
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WHEAT
Wheat futures are lower this morning. May CBOT futures are down 18 cents to 10.88-1/2. May KC is down 14 to 1075-1/4. May MPLS is down a dime to 10.60-1/4. Wheat futures continue to weaken on profit taking, but remain strong amid a lack of Black Sea and E.U. exports plus new worries about U.S. south plains HRW weather that could eventually support Chicago and KC wheat price. On Friday, Managed funds were net buyers of 2,000 Chicago wheat and are now estimated to be short 19,000 contracts. May Chicago wheat challenged upside resistance last night before turning lower, and now has key support down around 9.82. July futures are experiencing follow-through technical selling below last Tuesday’s lows while carving out the key reversal on the charts.
CATTLE
Cattle futures are called mixed. Cattle prices saw some recovery to end last week, supported by some value buying and position squaring going into the weekend. Short-term, charts are still on the defensive. There was moderate to active fed cattle cash trade in the North at mainly $138 to $140 live, and $218 to $222 dressed. That is mostly $2 to $3 softer compared to the previous week. Light trade developed in the South at $138 live, which was $2 softer than the previous week. The Choice cutout moved $0.45 lower this week, while Select decreased by $0.42/cwt. Prices were nearly steady despite large slaughter and ample supply as spring buying starts to ramp up. The strong tone in live markets helped support the feeder markets, as price may be a value at these levels. The Feeder Cattle Cash Index was 0.83 lower to 153.86. The selling pressure held off for a day, but the negative market tone is still in front of the market.
HOGS
Hogs are called steady to higher following strong buying support as prices posted triple-digit gains fueled by strong cash markets on Friday. The April hog contract stayed range bound between the 10-day and 40-day moving averages. Summer months posted that technical break, taking out the top of the near-term trading range and down trend. Cash prices trended higher overall last week and has been supportive, but the National Direct morning direct trade on Friday was 2.63 lower to 98.63 from Thursday. The cash Lean Hog Index was 0.65 higher to 99.91, posting its highest close since August. For the week, the index added .21. The April futures are trading at a 2.8150 premium to the index, and that could limit gains. Pork carcass cutouts trended lower on the week, and closed Friday down 1.65 to 102.55. The soft retail close to end the week could offer some pressure this morning. Hog slaughter this week was estimated at 2.378 million head, up 18,000 from the prior week, but down 70,000 from last year as hog supplies remain overall tight. The tighter supply picture, and strength in retails values on a historical level have helped support the cash markets. The price action on Friday may be the start of another run higher, fueled by those fundamental factors.
Author
Matthew Strelow