CORN
Corn futures were narrowly mixed overnight while staying tightly rangebound ahead of next week’s key USDA Quarterly Stocks and Prospective Plantings report. The dollar made a new high for the move before trimming gains, and crude was up 1.65/bbl, taking back half of yesterday’s losses. The recent strength in the dollar and potential for good spring planting weather in the U.S. is keeping a lid on upside price movement in corn. Technically, prices are viewed as overbought, too. A wire story reports the latest weather outlooks for the U.S. spring are favorable for American farmers to plant what could very likely be record corn and soybean crops. However, the moisture situation is vastly different than in the past two years, and that could come into play later in the season. It has been three years since strong U.S. corn and soy yields have been observed, so the Corn Belt’s plentiful soil moisture in 2019 and 2020 did not exactly fend off yield losses. In the southern hemisphere, a return to dryer weather in Brazil has the trade on edge about crops struggling in the second half of the growing season there. Weekly Ethanol Stats will be out today, Exports tomorrow.
SOYBEANS
Soybeans were higher last night by 7 to 9 cents in the nearby May contract to an overnight high of 14.32-1/2. Nov beans advanced 4-1/2 cents to 12.28. Meal was up 2.70 per ton, and soyoil was mixed after a push to new highs on Tuesday. Chinese Ag futures (May) settled up 90 yuan in soybeans, unchanged in Corn, up 37 in Soymeal, down 6 in Soyoil, and down 12 in Palm Oil. Malaysian palm oil prices were down 44 ringgit at 3,886 (basis June) at midsession on position-evening. South America Weather Forecast favors net drying in much of Brazil, excluding the far south and northwest Mato Grosso, which will still benefit fieldwork advancement but also raise concern of crop moisture stress. Shower and thunderstorm activity will return to the drier areas of Brazil in early April with resulting moisture below normal. Heading into today, Managed Money is still net long an estimated 155,000 soybeans, 550,000 lots of soymeal, and; 98,000 soyoil.
WHEAT
Wheat futures were mixed overnight with Chicago May futures up 3 to 6.37-1/2, KC down 1/2 cent to 5.81-1/2; and, May MPLS up 3/4 cent to 6.31. Managed Money is net long and estimated 10,000 contracts of SRW wheat. Wet weather in the U.S. has fueled an improvement in crop conditions. This, along with a rise in the dollar is keeping the market subdued despite having become technically oversold. Yesterday’s bounce off of session lows is a positive development for mid-week trade. In tender activity, South Korean feed groups bought 131,000 tons of optional-origin feed wheat.
CATTLE
Cattle calls are steady to higher. The cattle market is adding a little premium before cash trade develops this week on optimism of potentially higher trade. Cash trade was still very quiet yesterday with neither bids nor asking prices established. The Fed Cattle Exchange will be the start of that process with today’s auction. The cash optimism stems from last week’s higher trend and the improved retail strength. Choice carcasses gained 3.04 at the close to 233.99, and Select gained 2.18 to 225.23 on moderate movement of 143 load. The strong retail close should support prices on the open. Weekly slaughter last week was estimated at 624,000 head, down 23,000 from the prior week, and 36,000 head from last year. Beef carcass weights dropped 4 pounds from last week at 834 pounds/carcass, and that combination had last week’s total beef production at 519 million pounds, down 22 million pounds from last week.
HOGS
Hog futures are called higher based on a red hot cash market that continues to trend higher, gaining 1.00 to 92.71. The surge is allowing the April to stay strong and close with new contract highs on Tuesday, despite the premium over the index. Tuesday’s kill of 476,000 head was down a notable 17,000 head from last week & 23,000 head from year-ago. Midday carcasses surged 6.29 to 109.55, and held most of those gains, finishing 2.52 higher to 105.78 on moderate demand of 362 loads. The strong fundamentals may have the hog market looking again for new highs, after a short correction last week. Tomorrow will bring the next quarterly hogs and pigs report, and that may keep price choppy until then, but the report should give a look into the size and direction of the U.S. hog herd.
Author
Matthew Strelow