CORN
Corn futures traded two-sided overnight ahead of today’s March USDA Supply/Demand report scheduled for release at 11 AM central. May corn is down 2-1/4 cents to 5.44-3/4 within an overnight range of 5.40-1/4 and 5.47. Dec corn is down 2 to 4.79-1/2, consolidating after reaching a new contract high of 4.85-3/4 to begin the week. Similar movement occurred in crude overnight and the dollar is down 30 points. Looking ahead to the USDA numbers, the average trade estimate for U.S. Ending Stocks is 1.471 bil bu versus 1.502 last month. South America’s corn crop estimates are expected to see modest declines from the previous month, too. Weekly Ethanol Stats will be out tomorrow, Exports on Thursday. Overnight newswires read, three ships carrying ethanol were heading to China from the U.S. Gulf Coast in a sign that exports of the fuel were sharply increasing from the United States to the country. The shipments may surpass the total amount of U.S. ethanol that China imported last year, a positive development for the U.S. ethanol industry.
SOYBEANS
Soybean futures were firm overnight after gapping higher Sunday night only to see May close near the session low. The contract is up 6-1/2 cents to 14.40-1/4 this morning. Nov beans are fractionally higher to 12.54-3/4. Palm oil prices rose late to a 10-year high in trade ahead of end-of-February data from the Malaysian Palm Oil Board and surveyors’ export data for the first 10 days of March, both due out Wednesday. The rally in palm oil prices comes as South America weather woes squeeze the supply of soybean oil, according to newswire sources. Canola is also in the midst of making record highs. For today, The average trade estimate for U.S. Ending Stocks is 117 mil bu versus 120 mil last month. The U.S. departments of agriculture and energy plan to change two closely watched monthly reports to account for the rapid growth of renewable diesel, a clean burning fuel made from soy and other fats and oils. Surging demand for renewable diesel is part of a larger global transition to green fuels, and could increase prices of crops such as soybeans and canola it is derived from. The USDA plans to adjust how it reports soyoil used in biofuel in its monthly World Agriculture Supply and Demand Estimates (WASDE) report as soon as this spring.
WHEAT
Wheat futures were firm overnight, most likely due to a sharp pullback from new highs in the dollar overnight. May CBOT wheat is up 6 cents to 6.52-1/2. May KC is up 3-1/2 cents to 6.25-1/4, and May Mpls is up a nickel to 6.46-3/4. All three contracts formed outside trading ranges yesterday to further outline a sideways trading pattern around their respective 10 and 20-day moving averages. Trade estimates for Today’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. Overnight tender wires show Pakistan in the market for 300,000 tons of optional origin wheat.
CATTLE
Cattle calls are for steady to higher amid steady money flow on technical and value buying leading to very high open interest. Cash markets are likely to trade steady again this week around $114, as the market continues to be pressured by larger upfront supplies. A 10 pound drop in carcass weights helped support the June contract as the market is looking at tighter production, and more seasonal weights going forward. Demand stays supportive, even with the drop in retail values last week. Monday carcasses closed mixed with Choice slipping .25 and Select gaining 2.28. Choice carcasses still trading at 231.13 with moderate load count yesterday.
HOGS
Lean hog calls are steady to higher. The strong surge in pork carcasses at midday by nearly 8.00 helped push hog futures higher before sliding lower into the close, ending the day down .21 to 94.93. However, demand still supports the market overall highlighted by strong export numbers and optimism of longer-term demand. Cash markets remain strong with the Lean Hog Index gaining an additional .51 to 84.57. The index is closing the gap to the April contract, which could limit some pressure on April if the cash market works higher. However, export will need to support the idea of futures maintaining a premium to cash. Technical strength remains intact in the deferred contract while forging new contract highs for several consecutive days. Technically, the market is getting over-bought and may be due for a correction.
Author
Matthew Strelow