CORN
Corn futures were unchanged in the May contract overnight. May, at 5.60 made new highs at 5.85 on Thursday following Wednesday’s limit up move after USDA estimated U.S. 2021 acres below expectations, but heavy profit-taking drove the nearby contract back below 5.60 resistance. March 1 stocks were near trade estimates and implied higher quarterly feed use. We’ll get the April monthly USDA report on Friday. The weather outlook through April 14 is conducive to planting for growers which is a negative factor for price, however, Dec was up 6 overnight to 4.90-1/2 with technical momentum pointing to a test of Thursday’s new high of 4.93. A gap on the daily chart from Thursday is a bearish target at 4.77-1/2. The bottom line for the U.S. is going to vary greatly during the next two weeks. Rain should fall in a timely manner across the Dakotas and parts of Nebraska to the Great Lakes region where some moderate to heavy rainfall is possible for brief periods of time into early next week. Rain will also fall in a timely manner in the southeastern states and Delta with their greatest rain expected during mid-week this week and again during the weekend with net drying most of next week.
SOYBEANS
The soy complex was higher overnight after finishing last week with sharp losses on profit-taking pressure. May futures rose 14-1/2 cents to 14.16-1/2 where 10 and 20-day moving averages signal the middle of the trading range. Nov was up 16 cents to 12-79-3/4 with Friday’s new contract high etched at 12.85. Bean meal and oil are stabilizing and have a ways to go to make a serious run at their respective contract highs. Vegetable oil prices weakened from their peak, but additional price setbacks are likely to be limited by low stocks and relatively small export supplies in the next 3-4 months. Chinese Ag futures (May) are on holiday. Malaysian palm oil prices were up 33 ringgit at 3,770 (basis June) at midsession following rival vegoils, tight supply forecasts. Looking ahead, the market is concerned about slower China demand and lower Brazilian soybean prices versus lower-than-expected USDA estimate of U.S. 2021 soybean acres. The trade is still looking for U.S. 2020/21 soybean carryout to be below USDA’s guess of 120 mil bu unless prices slow demand. Even more concern lies with USDA’s acreage guess that could suggest U.S. 2021/22 soybean carryout would even be lower.
WHEAT
Wheat futures were mixed overnight, consolidating after holding support last week on drier forecasts for the U.S. Plains. The southern half of the Great Plains will likely be driest during the next ten days to two weeks and the same is expected in the northwestern Plains. USDA will begin tracking Weekly Crop Ratings at 3:00 (Central) this afternoon. In addition, bullish reversals occurred last week that give the markets some technical buoyancy to begin the week. USDA March wheat numbers suggested March 1 wheat stocks were higher than expected and 2021 winter wheat acres were higher than expected, but wheat could get its direction early this week from whatever corn does. May CBOT wheat was up 3 cents to 6.14 overnight. 200-day moving average support is 5.96. Resistance is 6.30. May KC is up a penny to 5.66, and MPLS is up 1-3/4 to 6.01-1/4.
CATTLE
HOGS
Hogs are called higher. Futures finished mostly higher to end the week with June at a new contract high, fueled by strong export demand. Weekly export sales set the tone for the end of the week, as new net sales last week totaled 61,000 MT, a marketing-year high, up 58% from last week and 43% from the 4-week average. China was the top buyer at 29,700 MT. Exports at 40,400 MT, keep the shipping progress strong. Thursday carcass values were stronger again, too, gaining .65 to 109.51 on moderate movement of 249 loads. Overall carcass values have stayed consistent, and the 5-day average for carcass values was 108.41. The demand tone for carcasses will continue to support the market. The lean hog index gained .46 to 98.50 as the trend remains higher. Technically, the hog market is overbought, but still searching for a top led by strong export demand, supporting both retail and cash markets.
Author
Matthew Strelow