CORN
Corn futures were up a dime overnight with nearby May corn at 7.40 and new crop December at 6.39-3/4. Trade estimates for this morning’s USDA Weekly Export Sales are 700,000 to 1.40 mil tons for old crop, zero to 200,000 tons for new crop. Outside market support stems from the dollar easing back to a one-week low, and crude working higher, up 4.61 this morning. U.S. stocks are weaker after yesterday’s 1/4% Fed hike-led rally. Rates, arguably, may need to be raised 2% to fight inflation. On Wednesday, Managed funds were net buyers 20,000 corn with their net long position estimated at 341,000 contracts. The next key USDA report is the March 31 acreage and stocks report. One private group estimates U.S. 2022 corn acreage at 92.4 mil versus USDA’s baseline 92.0 and 93.4 last year.
SOYBEANS
The soy complex was mixed with a firm tone last night while consolidation takes place. This morning, May beans are up 13 cents to 16.62-1/4. November futures are up 12 to 14.72-1/4. May meal is up .40 to 482. May soy oil topped out 1.00 higher at 74.55. On Wednesday, Managed funds were net buyers 6,000 soybeans, 5,000 soymeal and 1,000 soy oil and are now estimated long 153,000 soybeans, 95,000 soymeal and 79,000 soy oil. Trade estimates for this morning’s USDA Weekly Export Sales are 900,000 to 1.80 mil tons for old crop beans, 500,000 to 1.20 mil tons for new crop. Meal estimates are 100,000 to 300,000 for old, zero to 25,000 for new. Soy oil sales are estimated 5,000 to 45,000. Overnight, Chinese May beans were up 61 yuan; Soymeal up 62; Soy oil down 18; Palm oil down 138; Corn down 1; Malaysian palm oil prices overnight were down 164 ringgit (-2.59%) at 6173 due to a 33% increase in palm oil production.
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WHEAT
Wheat futures were mixed overnight while continuing to post wide trading ranges. May Chicago wheat is up 12-3/4 cent to 10.82 favoring the high end of last night’s 54-1/4 cent trading range between 10.31-3/4 and 10.86. May KC wheat is up a nickel this morning to 10.77-1/2, near the upper end of a nearly 40 cent overnight trading range between 10.40 and 10.79-3/4. May MPLS futures are up 5-1/2 cents to 10.55-3/.4. Trade estimates for this morning’s USDA Weekly Export Sales are 250,000 to 600,000 tons for old crop, zero to 100,000 tons for new crop. Wheat remains in an up-trend amid the perception that fewer exports will be available from the Black Sea region due to the war in Ukraine perpetuated by Russia. Even if the war was to stop today, it would likely take months for routine export business to resume. Meanwhile, a wetter weather forecast for the U.S. Plains looks to keep prices choppy for the near term with topping action unfolding on the charts.
CATTLE
Cattle futures are called mixed following disappointing trade on Wednesday as a weak cash tone pulled futures off early session highs. After a strong start to the session with April cattle pushing above the $140 price level, late session price fell back below the 200-day moving average on the close and posting a bearish reversal, turning charts more negative on the technical side. Cash trade is still slow to develop this week, but early bids were in the $138-140 ranges, which was disappointing. Asking prices were $142, and the lack of cash trade is concerning to the market, which was hoping for higher than last week. The retail market was mixed at midday on Wednesday, and closed the day firmer, (Choice: +.18 to 258.08, Select: 1.43 to 250.27) with demand light at 123 loads. Cattle slaughter was estimated at 125,000 head, steady with last week, but up 10,000 head from last year. Feeders found buying support with a move lower in grain prices. The Feeder Cattle Cash Index was 0.33 higher to 153.14 and is trading at a $4.11 discount to futures, limiting the gains in the front month contracts.
HOGS
Hogs are called mixed for this morning’s open. Summer contracts pushed to new highs, but the premium of futures to cash limits the April futures. The April hog contract tried to break out the trading range held in check by the 10-day moving average. After a sharp morning open, prices fell back to the 10-day moving average as support, with the 20-day average sitting over top. Summer months maintained their stamina, with June closing back above the $120 level, and establishing a new contract high. Late session prices faded, setting up some market indecision of a possible double top, or room to move towards the $124 price level. Cash has been supportive, the index’s weighted average price was 102.27 with 5-day average trending higher, trading at 100.95. Lean Hog Cash Index was .36 higher to 100.49. Pork cutouts have been trending higher this week, and were higher at midday, supporting the futures market. Cutouts were 4.05 higher at midday, but closed only .54 higher to 105.23 with a moderate load count at 294 loads. The price action has turned more friendly with a tighter supply picture, but we view the softer overall action could be signaling a near-term top.
Author
Matthew Strelow