CORN
Corn futures were narrowly mixed overnight. March, July and Dec are all down 1-1/2 cents this morning to 6.45-1/4, 6.44-1/2 and 5.86-3/4, respectively. Trendline resistance on the charts may cap further buying strength into the end of the week, particularly after USDA February U.S. and World Ending Stocks numbers came in above trade estimates, as well as South American production figures. Technical daily stochastics have reached overbought territory which could support reversal action if prices continue to weaken today. Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 900,000 tons. Basis bids for corn shipped by barge to U.S. Gulf Coast terminals were mixed on Wednesday, while nearby soybean bids slipped as barge freight costs have been falling, traders said.
SOYBEANS
Soybean futures remained pointed higher overnight with new highs posted across the board. Nearby March advanced 14-1/4 cents to a new peak of 16.09. July rose to 16.04-3/4; and Nov futures hit 14.48-1/4. May soybean meal got to 467.10 gains of 6.40 per ton and has risen to a new contract high in six of the last eight sessions. May bean oil futures are firm and rangebound. Trade estimates for Weekly Export Sales for 2021-22 beans are 900,000 to 1.50 mil tons. 2022-23 sales are seen coming in from 250,000 to 800,000 tons. 2021-22 soymeal export sales estimates are 200,000 to 500,000 tons; Soyoil – 5,000 to 25,000. Yesterday’s USDA data was mostly neutral. However, weather news is friendly for the market, allowing prices to continue to forge higher. Another two weeks of dry weather in Argentina should further trim production forecasts for the March report. Planalytics, on Wednesday lowered Brazil’s soy forecast to 3.29 tons/hectare, down from their previous forecast of 3.39 tons/hectare. The firm also lowered Argentina’s soy crop to 2.77 tons/HA from 2.85. Demand-wise, exporters announced a 240,000 ton soybean sale to China this week. The sales were for shipment in the 2022-23 season. Chinese Ag futures last night had May beans up 33 yuan; Soymeal up 67; Soyoil up 88; Palm oil up 166; Corn up 6. Malaysian palm oil prices were down 59 ringgit (-1.05%) at 5535.
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WHEAT
Winter wheat futures were up as much as 10 to 12 cents overnight as row crops pull the complex higher. May Chicago wheat got back above the $8 mark to 8.01-1/2 before slipping below that level to 7.96-1/2. May KC wheat peaked at 8.27 and is a nickel higher this morning to 8.21-2/4. May MPLS wheat is up 7 cents to 9.57. USDA data was mixed for wheat with U.S. numbers somewhat negative and World numbers friendly, so look for choppy action from wheat traders, while influenced by row crop trade and other outside markets. Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 400,000 tons for 2021-22; 25,000 to 300,000 tons for 2022-23.
CATTLE
Cattle futures are called steady to higher on follow-through from new contract high trade yesterday. New money continues to support prices after seeing the sharp reversal higher following last month’s Cattle on Feed report. Through Tuesday of last week, hedge funds (managed money) held just shy of 70,000 long cattle contracts. Historically, this is down from 130,000 to 150,000 net long positions held by the funds at their highest. Seasonality favors the bullish traders into the beginning of March. The front month continuous price is nearing resistance from the prior lows in 2014 and 15′, which could serve as a short-term price barrier. However, if price strength continues, $155 would be the next upside objective stretching into prior all time highs. Near record high beef prices bode well for this to happen. In the cash market, no cattle traded on the Fed Cattle Exchange yesterday. In Nebraska most light trade happened at $141/cwt, and most sellers passed $141 bids. In Texas and Kansas a few cattle traded at $140 but most sellers held out for higher prices.
HOGS
Hog futures are called mixed to higher as the market continues to seek a top. The entire complex is posting impressive gains. April hogs have reached the 200% retracement area based on the previous trading range while retesting the 202 highs. Prices are still pointed higher and the rally has pushed them into significantly overbought territory which will lead to a correction at some point, possibly today. In addition, April futures, at 104.775 are at an extreme premium to cash. Weekly Export Sales will be out this morning. December pork exports were down 16% from the previous year. China only purchased 40 million of the 531 mil lbs which was the lowest commitment since February 2019.
Author
Matthew Strelow