CORN
Corn futures were down sharply overnight and are testing the 30 cent daily trade limit as of this writing. May corn is down 29-3/4 cents to 6.60-1/2, and Dec is down 26-3/4 cents to 5.78. Row crop prices are exhibiting “buy the rumor, sell the fact” mentality in the wake of Russia’s invasion of Ukraine while posting significant reversals on the charts that will be difficult to overcome with South American weather news, or Supply/Demand tables. On Thursday, Managed funds were net buyers 17,000 corn contracts and are estimated to be long 356,000 corn contracts. In the four days, so far this week, May corn has posted a 60 cent trading range from Tuesday’s low of 6.56-1/4 to Thursday’s new high of 7.16-1/4. Russian troops are near Ukraine’s Capital. Some speculate once they control Ukraine they will resume grain exports. Combined, Russia and new Ukraine would control 40 mmt or 20% World corn trade and 60 mmt or 30% of World wheat trade. We will get delayed Weekly Export Sales number this morning. Trade estimates for old crop corn are 500,000 to 900,000 tons, zero to 300,000 tons for new crop. Weekly Ethanol production was up 1.49% from last week and 55.62% from last year. Outside markets are trying to stabilize. The dollar is up basis 8 points, Crude down .66 and stock index futures down 250.
SOYBEANS
The soy complex is down hard this morning with May beans down 40 cents to 16.14, and Nov down 31 cents to 14.20-1/2. For the 4-day trading week, May has put in a range from 16.03-1/2 to yesterday’s contract high of 17.59-1/4. November beans spanned $1.38-1/4 per bushel from 14.16-3/4, this morning’s low up to yesterday’s peak at 15.55. May meal futures are down 8.0 per ton to 447.60, and May soybean oil is down 1.85 to 70.12. Trade estimates for old crop weekly bean export sales are 500,000 to 1.20 mil tons, 450,000 to 850,000 tons for new crop. Soymeal sales estimates are 100,000 to 400,000 tons for old crop, zero to 100,000 for new. Soyoil estimates are 8,000 to 40,000 for old, zero to 20,000 for new. On Thursday, Managed funds sold 13,000 soybeans and 3,000 soymeal. The are now estimated to be long 188,000 soybeans, 97,000 soymeal and 85,000 soyoil. Chinese Ag futures overnight had May Soybeans up 215 yuan; Soymeal down 19; Soyoil up 52; Palm oil up 126; Corn up 12. Malaysian palm oil prices overnight were down 487 ringgit (-7.55%) at 5966.
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WHEAT
Winter wheat futures are in expanded limits today after seeing yesterday’s settlement prices include limit-up closes in a few contracts. Today’s daily limit is .75 per contract, but overnight movement has not tested that threshold. May Chicago wheat rallied to a new high of 9.60-3/4 overnight, and then retreated to an overnight low of 8.92 before settling in around 9.07, down 28. May KC wheat fell to an overnight low of 9.29-3/4 after first rising to a new high of 9.81 per bushel, and is trading near 9.40, down 28 cents as of this morning. May MPLS futures are down 28 cents to 9.92-1/4, near the lower end of last night’s 37-3/4 cent range after failing to find follow-through momentum higher overnight. Russian troops are near Ukraine’s Capital. Some speculate once they control Ukraine they will resume grain exports. Combined, Russia and new Ukraine would control 40 mmt or 20% World corn trade and 60 mmt or 30% of World wheat trade. Trade estimates for old crop wheat are 100,000 to 450,000 tons, zero to 100,000 tons for new crop.
CATTLE
Cattle futures are called steady to lower on follow-through from Thursday’s selling pressure. April cattle responded to the head and shoulders pattern, and are testing the bottom of the trading range and the 100-day moving average. Prices are still in an uptrend, but a pullback is happening as charts have turned more negative highlighted by a weakened technical picture, steady cash market, and the turmoil caused by the Russian military action in the Ukraine. USDA will release their next Cattle on Feed report today, and the market is positioning for those numbers. Expectations are for: Total cattle on feed to be at 100.8% of last year, marketings at 97.3% of last year, and placements at 99.2% of last year. Early cash trade was slotted at $142, steady with last week, while the market was targeting higher trade. The weakness in futures and retail values allowed packers to soften their bids on Thursday. Retail values have been trending lower held that trend into the close. Boxed beef prices were lower, (Choice: -1.64 to 259.24, Select: -4.41 to 254.55) with demand was moderate at 170 midday loads. Feeder cattle finished sharply lower, pressured by the weak cattle complex. Feeder cattle posted a strong gap lower, and failed to see prices find any footing, opening the potential for further downside trade.
HOGS
Hog futures are called mixed. The market experienced additional long liquidation yesterday led by pressure for weak cattle and outside markets. This was not a big surprise after Wednesday’s key bearish reversal in April hogs. The first level of support under the April contract is the 10-day moving average at 106.000, which the market tested on Thursday. Pork cutout values are still trending higher, and closed $5.01 higher to 114.13. The load count was moderate at 265 loads as ham and belly primal cuts again supported the market. The strong retail close should support the market open on today. Cash was supportive with the National Direct morning trade marking a base price of 87.58 and the Cash Lean Hog index unchanged at 98.16. The April futures is still holding a 7.365 premium to the index, setting up some more potential profit taking as the market nears the end of the month. The fundamentals stay supportive, on a tighter hog supply overall; And, Technically, the hog market is still in a strong uptrend, but signaling a change direction amid some needed profit taking. The depth of the correction today will be key.
Author
Matthew Strelow