CORN
The corn market is trading 1-1/2 cents lower this morning at 7.55 in the May contract, while the new crop December contract is a penny lower at 7.03-3/4. The stock markets are firmer this morning and crude oil is trading around $97. The recent weakness in the crude market is being linked to more countries releasing supplies from their strategic reserves. The US Fed Governor said they should reduce the Fed’s balance sheet and aggressively raise interest rates to combat inflation. There are concerns that a rise in US interest rates could slow domestic demand. The markets are preparing for Friday’s USDA WASDE report, with estimates for 21/22 US corn ending stocks at 1.415 billion bu. versus 1.440 billion bu. last month. We estimate managed funds were net sellers of 3,000 corn futures yesterday, and to be long 365,000 contracts. Export sales will be released later this morning and are estimated near 475-1,000 mt for old crop and 100- 400 mt for new crop.
SOYBEANS
The soybean market opened higher for the overnight session and is trading 16.26-1/2, up 7 cents in the May contract, while the November contract is 15.52, up 8 cents. Soybean meal is up 2.0 at 463.80 and soybean oil is 72.11, up .28. The markets continue to prepare for Friday’s USDA WASDE report, with estimates for 21/22 US soybean ending stocks at 262 million bu. versus 285 million bu. last month. US export premiums are under with Brazil’s June through August, and there are no Brazil FOB offers from September through January. Which implies both old and new crop soybeans need to add demand premium. We estimate managed funds were net sellers of 6,000 soybean futures yesterday, and to be long 150,000 contracts. Export sales will be released later this morning and are estimated near 100-750 mt for old crop versus 1,305 and 100- 400 mt for new crop.
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WHEAT
The wheat market is lower this morning after opening and trading higher overnight. The May Chicago contract is 10.34-1/4, down 4 cents. May KC is 10.80, down 5 cents and May Minneapolis is 11.08, down 0-3/4 of a cent. While Russia continues to export small quantities of wheat, there are thoughts that the USDA may be too high in their export estimates from Russia, Ukraine and the EU. The markets continue to prepare for Friday’s USDA WASDE report, with estimates for 21/22 US wheat ending stocks at 656 million bu. versus 653 million bu. last month. Export sales will be released later this morning and are estimated near 500-1,150 mt versus 176 mt last week. We estimate managed funds were net sellers of 2,000 Chicago wheat futures yesterday, and to be long 45,000 contracts. The forecast for the US southern Plains is mostly warm and dry.
CATTLE
The cattle market is called to open mixed this morning.
Cattle futures turned higher on Wednesday, ending a 5-day selling streak, as contract saw some value buying and grain markets softened. One day doesn’t make a market turn, but the price action was more friendly on Wednesday, as prices shook of early selling pressure, and posted bullish hook reversals to the upside on the close. Follow through in today’s trade will be key, and that may be more directed by the action in grain markets. Further recover could have June futures looking to test resistance up to $135.300 and the 200-day moving average, a key barrier. The cash market has stayed light this week, with little business on Wednesday. So far on the week, the market has marked most trade at $138 and $222 dress trade, fully steady with last week. Boxed beef values have been trading firmer but finished lower on Wednesday’s close with Choice slipping .49 to 271.04 and Select 1.85 lower to 261.05 on movement of 141 loads. USDA will release weekly export sales this morning before the market open, and another strong week could help support prices. Like live cattle, the feeder marker is trying to turn the corner higher, supported by the weaker grain markets on Wednesday. After May feeders have dropped $10 in the last six trading sessions, a positive turn higher could bring some additional short covering going into the end of the week. The markets are trying to put in a turn, but one day doesn’t signal the bottom. Charts are still weak overall, but improved price action was seen on Wednesday. The cattle market is starting to look like a value, and that may have triggered some buying on Wednesday.
HOGS
The hog market is called to open mixed this morning.
Hog futures ended the aggressive selling streak on Wednesday, posting moderate gains as the cash market tried to find footing on Tuesday afternoon, and the recent selling spree made hog futures a value. After a 6-day losing streak, hog futures found some buying support, but price action was more consolidative in nature than a price correction. Despite the positive gains, trade occurred within the trading range of Tuesday. June hogs challenged but stayed below the 50-day moving average and that keeps the door open for a test of the 100-day and trendline support as low at $104. e cash market has helped trigger, did see firmer afternoon trade, but gave that value back at midday trade. National direct afternoon values closed .40 lower at 101.02, and the 5-day average is at 101.25. Firmer than midday trade. Lean hogs index was lower, losing 0.75 to 101.66. April contract expires on the 14th, so the hog market may be looking at the premium of the deferred futures, which still a concerning wide stance. Pork carcass values were firmer at the close, gaining .77 to 104.37. Load count was at a moderate at 286 loads. Weekly exports sales will be released this morning before the market open, and those number could help dictate the price action. Wednesday was a price consolidation day as hogs are searching for a low, but the technical picture is still weak, and prices are tending lower.
Author
Scott Masters