CORN
Corn futures were mixed overnight as prices settle into a sideways pattern now that the March USDA numbers are known. Ending stocks were left untouched, but exports remain a moving target for the market. Trade estimates for this morning’s USDA Weekly Export Sales are 400,000 to 750,000 tons for old crop, 25,000 to 100,000 tons for new crop. Overnight tender activity showed South Korean feed groups bought 261,000 tons of optional-origin corn; Turkey seeks 115,000 tons of optional-origin corn. May corn traded a high of 5.40-1/2 down to 5.31-1/4 overnight, and were last up 3-1/2 cents to 5.37-1/4. Nearby March contracts go off the board tomorrow. Dec corn was up a penny to 4.81-1/4 while forming a pennant on the daily charts that will eventually give way to what many believe are new highs given the bullish tilt to the market. The dollar is down 25 basis points this morning, finishing off an upward correction from the past week and offering some outside market support. Sellers outnumbered buyers across the grain and oilseed complex yesterday. Managed Money is net long an estimated 336,000 corn.
SOYBEANS
Soybean futures traded two-sided overnight, as well as meal and soyoil contracts. Malaysian palm oil prices were up 79 ringgit at 4,035 (basis May) supported by monthly data showing low stock levels. May beans are down 2-1/4 cents to 14.07-1/2. Nov is down 3-3/4 cents to 12.35. Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 350,000 tons for old crop, 50,000 to 300,000 tons for new crop. In tender activity, South Korea seeks 12,000 tons of optional-origin soymeal. Long liquidation is weighing on market sentiment after UDSA chose not to lower carryout or South American crops. However, newswires are filling up with stories of hectares of beans unable to be salvaged in Brazil’s Sorriso region due to wet conditions ruining the chances of harvesting crops. The national forecast in the north will still be wetter than preferred leading to some additional fieldwork delays. Net drying will continue in the south into the middle of next week and this will likely be followed by some timely rain. In Argentina, some improvement in soil moisture is expected in the next two weeks, especially after this weekend. Rain will be notably greater in the nation Monday through next Wednesday. Managed Money is net long an estimated 160,000 soybeans; 54,000 lots of soymeal, and; 128,000 soyoil.
WHEAT
Wheat futures were mostly lower overnight in light trading. May CBOT wheat lost 3-1/2 cents to 6.49. May KC was down 4-1/2 to 6.12; And, May Mpls was down 2 to 6.39-1/4. Prices are facing headwinds from a lack of bullish news and the recent upturn in the greenback, which has since begun to retreat. USDA disappointed market bulls by making only modest changes to supply and demand tables. HRW exports were trimmed and world wheat stocks shaved 5 mmt due to Chinese feed demand, but many were expecting the agency to lower their estimate of EU and Russian exports due to lower supply and export taxes, respectively. Trade estimates for this morning’s USDA Weekly Export Sales are 150,000 to 350,000 tons for old crop, zero to 100,000 tons for new crop. Tender activity showed Egypt seeking optional-origin wheat, and Philippines passing on 385,000 tons of optional-origin feed wheat. Meanwhile, winter wheat contracts are consolidating below their 10 and 20-day moving averages which would reinforce more weakness if buying interest fails to develop.
CATTLE
Cattle calls are for steady to lower. Cash, at $114/cwt is steady cash with last week and helped pull the premium out of the front months on Wednesday. Carcasses stayed soft on Wednesday’s close with Choice losing 1.74 to 227.29 and select dropping 3.98 to 219.82. The load count was strong at 132 loads. Though the trend is lower in retails, it’s still well above 5-year levels. Weekly export sales today should stay supportive with 2021 starting out strong on beef export sale and shipments. Prices were working nicely higher the past few sessions, but upward momentum slowed on Wednesday. the price action today will be key going into the end of the week. Feeder cattle are facing pressure from the weakness in the live cattle, but a weaker grain market may have limited downside pressure. Notable strength in equity markets could provide some spill over support into the cattle complex.
HOGS
Hog calls are for steady to higher. Strong retail demand has supported the hog market, and pork carcasses closed .83 higher to 97.67 on moderate movement of 297 loads. Pork carcasses are trending well above 5-year averages and have bolstered the cash market. The Lean Hog Index gained .76 to 86.08, as the trend stays aggressively higher at its highest levels since June of 2018. Since the start of the year, the Lean hog Index has gained more than 27 points, reflecting the strong cash market. Deferred contracts are maintaining their higher trend supported by the prospects of long-term demand and tighter hogs supplies. June to October contracts posted new contract highs again on Wednesday. The trend in slaughter numbers is working lower, with estimated slaughter Wednesday at 492,000 head, down 5,000 from last week.
Author
Matthew Strelow