CORN
Corn futures were narrowly mixed last night in one of the more subdued overnight sessions in a long time. May and December are down 2 to 3 this morning to 7.45-3/4 and 6.64-1/2 respectively. For the week, May is about unchanged while trading just below contract high resistance. However, Managed funds have bought 28,000 corn contracts the past 5 days allowing the contract to post 5 days of higher lows through Wednesday. During that time, corn open interest increased 73,000 contracts. Then, a pullback in crude combined with a slower weekly U.S. corn export sales and increased Brazilian corn export sales may have triggered some long liquidation before next week’s USDA acreage and stocks report. December is up a dime after posting a new high this week. In outside markets, the dollar and crude are weaker this morning.
SOYBEANS
Soybean futures traded two-sided overnight and are down 7-3/4 cents this morning to 16.93 versus last Friday’s settlement at 16.68. November beans are down 3 to 14.89-3/4, up 23 cents on the week. After 6 days of higher lows through Wednesday, soybean futures are finally seeing some profit-taking pressure. During that time, soybean open interest increased 20,000 contracts and Managed funds bought 32,000 soybean
contracts during. Slow weekly US soybean export sales and increased Brazil soybean export sales may be triggering some long liquidation before next weeks USDA acreage and stocks report. May meal is up 1.10 this morning to 487.10 compared to last Friday’s settlement at 479, and May bean oil, down 1.10 to 73.15 this morning, up 1.20 this week.
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WHEAT
Wheat futures futures were narrowly mixed overnight. May Chicago and KC contracts are fractionally higher this morning at 10.80 and 10.95-1/4, respectively. For the week, the Chicago contract is up over 22 cents. KC wheat is up 25 cents. Some Chicago and KC May longs have rolled to the December futures contract as nearby fundamentals are not as bullish and due to fear Ukraine war could continue. May MPLS spring wheat, up 4 cents this morning to 10.86-3/4 is up 26 cents this week. Like corn, last night’s light wheat trade meant relatively little movement, price-wise as the trade seems content with the this week’s consolidating action ahead of next week’s March Planting Intentions data.
CATTLE
Cattle are called steady to higher. The price action yesterday near the top of the range opens the door for some additional buying support, but the market may stay choppy going into this afternoon’s USDA Cattle on feed report. Expectations for the report are: Total Cattle on feed as of March 1 at 101.6%, placements at 106.5%, and marketings at 103.4%. Apr live cattle rallied off support but traded between the 20 and 40-day moving averages, building a “bull flag” potential pattern. 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. Cash trade started to develop on Wednesday, and saw some light clean up trade on Thursday, 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. Cash trade is likely done for the week. Closing beef retail prices traded mixed, with choice carcasses gaining .81 to $262.41 but select was .65 lower to $252.59. the load count was light at 62 midday loads. The choice/select spread moved wider at midday to $9.82, reflecting the improved demand tone. On the export front, Japan and the U.S. announced the framework agreement to allow more U.S. beef imports. More details regarding this agreement will be available in up coming days, but still a longer-term positive for the cattle markets.
HOGS
Hogs are called mixed. Prices are pointing higher in the hog market as the technical picture and fundamental picture are staying supportive in the near term. We view prices are likely going to be looking to establish a new near-term top. On Thursday, Apr hogs opened firmer and closed above the 20-day moving average, improving the technical picture. Follow-through gains will likely see Apr challenge the March 16 price spike at 104.700. Strong fundamentals could push summer month contracts higher in the near term. Pork retail values closed softer on Wednesday afternoon, but buyers stepped back into Thursday’s pork values as prices closed firmer, trading 1.62 higher to $108.01 on a load count of 257 loads. Cash markets have remained firm in response to the strong retail values. National direct trade at midday was .57 lower to $106.57, with the 5-day average was at $106.22. The Lean Hog Cash Index was slightly lower, losing 0.56 to 101.21. The Apr contract will likely stay tied to the cash market with only 3 weeks of life left in the front-month contract.
Author
Matthew Strelow