CORN
Corn futures were up as much as 10-3/4 cents overnight to a new high of 5.56-1/4 (May). Dec corn made it to a new high of 485-3/4 on gains of 4-1/4 cents as new contract highs in soybeans, soyoil and crude start the week. Once most Americans get vaccinated, demand for fuel is expected to increase and push energy prices higher. U.S. cattle feeders are also concerned about low corn supplies for summer feeding. Meanwhile, positioning for tomorrow’s anticipated March USDA Supply/Demand report is leading to a higher bias for prices. USDA is not expected to make big changes to South America corn crops or US 20/21 soybean carryout tomorrow, but last week Argentina lowered their corn ratings as crops are entering critical yield determining period. The country will experience some important scattered showers and thunderstorms in the far southwest Monday and again late this week and into early next week in many northern and western crop areas. The 6 to 10 day has moderate rainfall amounts with good coverage in the main growing regions. Late Brazil planted corn crop could suggest they may not have corn for export until July-Aug.
SOYBEANS
Soybean futures gapped higher to new highs at the beginning of last night’s overnight session. May beans rose 30 cents to 14.60 and Nov to 12.65-1/4 on gains of 18 cents. Soyoil futures made new highs for the third session in a row. There is talk that long soybean managed funds will add to long positions due to tightening U.S. balance sheets on March 15 when position limits will increase. Chinese Ag futures (May) settled down 30 yuan in soybeans, up 24 in Corn, up 50 in Soymeal, up 314 in Soyoil, and up 276 in Palm Oil. Malaysian palm oil prices were up 142 ringgit at 3,883 (basis May) following rival vegoil markets and a jump in crude oil prices on news of missile attacks on Saudi oil installations. Dry weather and poor crop ratings in Argentina combined with expectations for USDA to trim U.S. and world ending stocks in tomorrow’s monthly Supply/Demand report helps support the rally. USDA, though is not expected to make big changes to South America soybean crops. Newswires report Brazil’s truck freight rates are soaring as soybean harvest lags. February truck freight rates touched a 2.5-year high on a key soybean route in Brazil’s top grain state of Mato Grosso amid harvest delays.
WHEAT
Wheat futures were firm overnight. July Mpls managed a fresh 1-week high of 6.57-3/4 on gains of 6-3/4 cents. May CBOT wheat was up as much as 10-1/2 cents to 6.62-3/4 before giving up much of the rally. May KC reached 6.35 after tacking on 8-3/4 cents and is mostly steady this morning. Higher row crops lend support, but a new multi-month high in the dollar is subduing some of the bullishness. U.S. wheat is not competitive to most World buyers. USDA is not expected to make big changes on their March 9 US or World wheat supply and demand. The key will be 2021 north hemisphere weather and Russia wheat export policy. Large inverses between old and new crop EU and Russia export prices and carries in U.S. makes U.S. new crop prices higher vs Russia. Trade estimates for Tuesday’s USDA report show U.S. 2020/21 wheat carryout near 839 mil bu vs USDA 836. World wheat ending stocks are estimated to be near 304.3 mmt vs USDA 304.2. Tender Activity overnight had Algeria seeking 50,000 tons of optional-origin wheat, Pakistan passed on 300,000 tons of optional-origin wheat and South Korea bought 130,000 tons of optional-origin feed wheat.
CATTLE
Cattle calls are for steady to higher. The cattle market saw value buying and a technical turn to end the week Friday as money moved into the commodity markets overall. Follow-through will be a key to start the week. Cash trade was steady on the week again at $114, and expectation are for the same this week. Production is returning to levels seen prior to the winter storm and limited buyer interest pressured the cutout. Choice boxes lost $6.51 and Selects declined $7.11 last week signaling a possible seasonal peak in retails, while trading above year ago levels on good demand. Feeders are likely to have a negative reaction to strength in feed prices after experiencing a price recovery and extremely volatile close last week.
HOGS
Lean hog calls are steady to higher. Cash markets remain strong and supportive of futures prices. The cash index gained 4.11 last week, but is still a 3.11 discount to April futures, which could limit some upside. Demand stays strong, and Pork carcasses gained $3+ over the week, ending 1.62 higher to 95.14, and that strength should support the open today. Deferred contracts are technically strong, posting new contract highs and maintaining a strong uptrend. Prospects of strong demand and overall tighter hog supplies help support those contract months.
Author
Matthew Strelow