CORN

Corn futures unchanged overnight at 5.50 in the nearbys and 4.59 in the Dec contract.  We’ll get Weekly Export Sales numbers this morning, delayed one day due to the markets being closed on Monday.  Trade estimates are 800,000 to 1.20 mil tons compared to 1.440 mil last week.   The USDA annual Outlook Forum came out with 2021 U.S. corn acreage at 92 million.  The trade was looking for a number closer to 93 mil.  They estimate U.S. 2021/22 on farm corn prices near 4.20 versus 4.30 this year.  Today, the group will issue new U.S. 2021/22 supply and demand tables with many expecting higher U.S. 2021/22 corn and soybean carryout due to increased acres and yield.  Technically, corn futures have seen a slowdown in upward momentum which could reinforce a downward corrections if prices continue to stall.  March options expire today.  First Notice Day for March futures in grains is next Friday.

SOYBEANS

Soybean futures were up overnight with gains of 6 to 7 cents ahead of Weekly Export Sales.  Trade estimates range from 300,000 to 900,000 tons for old crop compared to 804,000 last week.  New crop sales are expected to be 50,000 to 300,000 tons versus 178,000 last week.  Weekly soymeal sales are expected to be 100,000 to 350,000 versus 263,000 last week.  Rumors are making their way through the marketplace that some China buyers might cancel some open U.S. unshipped soybean sales.  Malaysian palm oil prices were up 37 ringgit at 3,526 (basis May) supported by some bargain buying and gains in the soyoil market.  Currently, Egypt seeks 30,000 tons of optional soyoil.  Nearby bean contracts continue to trudge sideways near 13.80.  Nov beans are hovering around 11.90.  The two-day USDA Outlook Forum, so far has come up with U.S. 2021 soybean acres forecast at 90.8 versus 89.5 expected and 83.1 last year.  USDA estimates U.S. 2021/22 on farm soybean prices near 11.25 versus 11.15 this year.  Today, they will issue new U.S. 2021/22 supply and demand with a 2021 U.S. soybean crop at 4.520 and 2021/22 soybean carryout at 179 vs 120 this year.

WHEAT

Wheat futures were unchanged overnight after yesterday’s rebound from Wednesday’s price drop.  May contracts have reclaimed all of Wednesdays losses, underpinned by a 35 point drop in the dollar overnight and news that the 10 t0 15% of the crop that was heading in Texas may be gone due to the recent weather.  However, the market is still bumping up against top-of-the-range resistance as long range weather maps suggest more normal temperatures in the 90-day forecast.  Today, USDA will issue new U.S. 2021/22 supply and demand data.  The trade expects the 2021 U.S. wheat crop at 1.874 bil bu and U.S. 2021/22 wheat carryout near 769 mil bu vs 836 this year.  USDA’s Chief Economist estimated U.S. 2021 wheat acres at 45.0 versus 45.3 expected and 44.3 last year with 2021/22 on-farm wheat prices at 5.50 versus 5.00 this year.  Trade estimates for today’s USDA Weekly Export Sales are 250,000 to 650,000 tons for 2020/21; Zero to 50,000 tons for 2021/22.  Overnight tender activity showed Pakistan seeking 300,000 tons of optional-origin wheat; Tunisia seeks optional durum & soft wheat, S. Korea bought 65,000 tons of optional feed wheat.

CATTLE

Cattle calls are mixed for today.  We look for prices to stay choppy before today’s USDA Cattle on Feed report.  Expectations are for: On Feed at 101%, Placements at 100.1%, and Marketings at 94.5% of last year.  The only caveat is the premium the April live cattle contract, at 122.92 holds over cash that could lead to some back-peddling.  Cash trade has been light overall.  The Fed Cattle Exchange had a second auction yesterday, and some countryside cash trade developed at $114/cwt, steady with last week.  More additional trade may develop today.  The market is still dealing with impacts of a southern winter storm and packing plants idled or slowed in their daily processing.  Carcass values stay strong with Choice beef gains of 1.34 to 238.85, and Select up 1.83 to 227.47.  Weekly export sale report could provide additional strength as numbers remain strong on good export demand.

HOGS

Lean hog futures are called steady to higher ahead of Weekly Export data and on the heels of yesterday’s price recovery off of early session lows.  The Lean hog index gained an additional 1.02 to 76.53, its highest levels since October.  April futures are still at a 8.395 premium to the index, which could limit upside.  Retail carcass values finished 1.64 higher to 90.81, maintaining some of the midday strength on moderate demand of 316 loads.  Weekly export sales report may help set the tone for today, as the export market has been very support of prices on good demand.  The market will continue to watch the Chinese demand as well as the activity of other traditional buyers.  Farther out, deferred contracts are maintaining their overall strength on the strong demand prospects and the idea of tighter hog supplies into the second half of 2021.

Author

Matthew Strelow