CORN
Corn futures continued to soar overnight following the 3-day Easter holiday weekend. New highs were posted across the board despite steep gains in the dollar. In other outside markets, crude is backing off overnight strength that tested 108 before slipping into negative territory this morning. Nearby May corn futures broke through the $8 barrier this morning on gains of 10-1/4 cents to 8.00-1/2. Year-To-Date nearby corn futures are up 35%. Dec corn hit a new high at 7.44-1/4 on gains of 9 cents. Last Thursday, Managed funds were buyers of corn and are adding to their estimated net long position of 371,000 contracts today. Talk of lower Ukraine exports and higher U.S. livestock and ethanol margins offer support. The U.S. 30 day Midwest weather forecast suggests U.S. farmers should get intended 2022 acres planted on time. Weekly Export Inspections will be released later this morning.
SOYBEANS
The soybean complex was mostly higher overnight led by new highs in soy oil futures. May beans were up as much as 16 cents to 16.98-1/4. November beans peaked at 15.13-1/2, up 12 cents. Meal futures were mixed. Year-To-Date nearby soybean futures are up 27%; Soymeal up 12%; Soyoil up 42%. U.S. March NOPA soybean crush was a record 181.7 vs 178.0 last year. Soyoil stocks were 1,908 mil lbs vs 2,072 expected and 1,771 last year. Over the weekend, China bought 389,000 metric tons of soybeans. Of the total, 121,000 metric tons is for delivery during the 2021/2022 marketing year and 268,000 metric tons is for delivery during the 2022/2023 marketing year. Another 177,000 metric tons of soybeans were reported for delivery to unknown destinations during the 2021/2022 marketing year. Meanwhile, the continued lack of Black Sea exports of sunflower oil have pushed prices higher and supports soybean oil and soybeans.
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WHEAT
Wheat futures traded sharply higher overnight to start the week. July Chicago and KC contracts are testing last week’s highs, up 19 cents to 11.23-1/2 and 1176-1/4, respectively. July MPLS wheat was up 29-3/4 cents to a fresh 5-1/2 week high of 11. 76-1/4. Year-To-Date nearby futures are up 45% in SRW, up 46% in HRW and up 19% in HRS. Matif wheat futures are up on the realization that Black Sea wheat exports may be down and EU will have to try to make up the difference. Russia has increased its shelling of Ukraine’s eastern cities after the sinking of a key ship. In the U.S., temperatures in Kansas should warm up into Friday ahead of light rains Friday night and Saturday. Most estimate US 2021/22 wheat carryout near 672 mil bu vs USDA 678 and 2022/23 carryout near 815.
CATTLE
The cattle market is called to open steady to higher as momentum studies support more upside probing of price. Demand seems to be strong enough to support at least choppy to higher trade to start the week. Last week, cash prices in the north were $144 to 145/cwt, up $3-5 from the previous week. In the south cash struggled around $139/cwt due, in part to grading differences of 3 to 5%. Cattle prices are turning the corner in the near term, as a firmer cash tone and improved demand prospects going into the late spring are bringing some buying optimism and positive money flow. Stock index futures are lower this morning and the dollar is sharply higher which could weigh on cattle market strength.
HOGS
The hog market is called to open mixed. Cash markets and disappointing export sales from last Thursday may keep buyers on the sidelines, despite a firmer retail tone. June hogs, at 118.475 are holding 50-day moving average support drawn at 116.761, but are struggling to get above last Tuesday’s high of 119.10. From a support-standpoint, hog numbers are still expected to tighten, and the rate of slaughter may be our first indicator of supplies tightening. However, the premium of futures to cash may already have that tighter supply factored in.
Author
Matt Strelow