CORN
Corn futures traded two-sided overnight and are down slightly this morning. Nearby May corn is down 4 cents to 7.53-3/4. Traders are looking up at the contract high of 7.82-3/4 as a major resistance level, but a series of higher daily lows since March 16 low offers technical support. Dec corn is fractionally lower this morning to 6.71-1/2 while consolidating inside Wednesday’s new contract high trading range. Trade estimates for this morning’s USDA Weekly Export Sales are 800,000 to 1.80 mil tons for old crop, 100,000 to 400,000 for new crop. A strong dollar this morning and weaker crude are weighing factors for corn heading into today’s session. Meanwhile, overall, inflationary forces are ushering money flow into the corn market into spring. Favorable weather may be helping Brazil’s 2nd corn crop, thus pushing Brazil’s July corn export price below U.S.
SOYBEANS
Soybean futures were down overnight with May and Nov contracts off 9 cents to 17.09-1/4 and 14.99, respectively. May meal lost 1.80 per ton to 483.30. May soy oil was down .70 to 75.27. Trade estimates for this morning’s USDA Weekly bean Export Sales are 500,000 to 1.30 mil tons for old crop, 300,000 to 800,000 for new crop. Meal, 100,000 to 300,000 for old, zero to 35,000 for new; And, soy oil, zero to 30,000 for new, zero to 20,000 for new. Tight World supplies causing a shift from South America exports potentially to the U.S. keeps the complex underpinned heading into the March 31st Prospective Plantings report. China soybean crushers, reportedly need to buy 180-220 mil bu for April-May. They
also need to buy a significant amount for June through September. Of that total, they need to buy 500 to 550 mil bu for Aug-Sep at a time when Brazil soybean supply is limited and U.S. carryout is near 285 mil bu.
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WHEAT
Wheat futures futures eased a nickel overnight across the board. Nearby May Chicago is trading around 11.00 this morning, KC wheat is at 11.06-1/2; And, May MPLS, 10.84-1/4. Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 600,000 tons for old crop, 100,000 to 300,000 for new crop. U.S. export prices remain at a premium to Europe and Black Sea, and talk of increased Russia wheat exports to Turkey and Egypt has triggered new selling. There are reports of heavy money flow into commodity ETF’S, including wheat. Last Friday almost $200 million came into GSCI, an index of 24 exchange-traded futures contracts that represent a large portion of the global commodities market. There is anticipation of heavy inflows into commodities at the start of Q2, especially with growing concerns the U.S. Fed is falling further behind the curve. U.S. south Plains moisture is helping wheat there. More showers are possible the next 10 days. A ridge of high pressure could develop over U.S. plains in mid April.
CATTLE
Cattle are called steady to higher. Cattle futures saw good price action overall on Wednesday, as the April live cattle contract rallied off support, and closed back above the 10 and 20-day moving averages, building a “bull flag” potential pattern. open the door for some additional buying support going into the start of today’s session. A breakout to the upside could have the market testing the 100-day moving average at $142 level. A move out of this pattern will likely take some improved fundamentals. USDA’s cattle on Feed report is tomorrow afternoon, so the market could see some position squaring and short covering into those numbers. Cash trade started to develop on Wednesday, with mostly steady trade with last week, as $138 seemed to be the price across the South. Northern dressed trade was running $221-223, steady to weaker with last week. April feeders closed above the 10 and 20-day moving averages, opening the door for additional technical strength.
HOGS
Hogs are called steady higher on follow-through from a strong retail market helping push prices to the top of the range, or, in summer months, new contract highs. April hogs gapped higher yesterday and closed above the 20-day moving average, posting its highest close since March 8. Follow through gains will likely see April challenge the March 16 price spike at 104.700. Summer hogs look strong, but June prices failed at trendline resistance over top the charts at $124.500, but still finished in the top of the trading range for the day. Prices may consolidate here, but strong fundamentals could push the market even higher in the near-term. Pork demand has been supportive. Retail values closed $5.10 higher on Tuesday afternoon, and that fueled the strength to start Wednesday. Wednesday closing pork values softened off strong midday values to close .32 lower to $106.39 on a load count of 299 loads. Cash markets have stayed firm in response to the strong retail values. National direct trade at midday was 5.59 higher to $107.68, with the 5-day average lifting to $106.29. The April contract will likely stay tied to the cash market with only 3 weeks of life left in the front month contract.
Author
Matthew Strelow