CORN
Corn futures are higher this morning following an overnight session which saw both sides of unchanged. The May contract is trading 7.73-1/2, up 4-3/4 cents and the December contract is 7.21-1/2, up 5-1/2 cents. Weekly export inspections will be released later this morning. On Friday, the USDA kept the 21/22 carryout estimate the same at 1.440 bbu which was in line with trade estimates. The USDA kept US exports unchanged at 2500 mbu, while lowering Ukraine’s 23 mmt. There are thoughts that new money came into the market and bought futures based on ideas that the USDA’s corn export estimate may be too low, and the long-range forecast of a wet weather in the east and dry in the west. The trade will need to see new export sales to in order to push prices higher. We estimate managed funds were net buyers of 9,000 corn contracts on Friday and to be net long 372,000 contracts. Weather in the Midwest continues to be warm and dry in the west, cool and wet in the east. Weather in central Brazil is dry, which may stress the pollinating Safrina crop there. Initial support for the May contract should be near the 10-day moving average of 7.57, while nearby resistance is near the contract high of 7.82-3/4.
SOYBEANS
Soybean futures are lower this morning after opening the evening session firmer and trading near $17 in the May contract. May soybeans are trading down 5-3/4 cents at 16.83-1/4, and November soybeans are down 3 cents at 14.92-1/2. May soybean meal is up $1.60 at 469.80 and May soybean oil is down .50 cents at 74.62. Weekly export inspections will be released later this morning. Lower energy prices may be offering resistance to soybean oil and soybeans this morning. On Friday, the soybean market gained support from the fact that the USDA dropped the 21/22 US soybean carryout 25 mbu to 260 mbu. Which was done due to the smaller crop in Brazil and higher US exports. The USDA also lowered China’s import estimate to 91 mmt, which some think is 3-4 mmt too low. Some think the lower Argentina crop and lower Brazil 2022 exports should send July beans above the 17.00 resistance level. We estimate managed funds were net buyers of 15,000 soybean contracts on Friday and to be net long 179,000 contracts. Weather in the Midwest continues to be warm and dry in the west, cool and wet in the east. Support should lie under the market near the 50-day moving average of 16.33, while nearby resistance is near 17.00.
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WHEAT
All three wheat classes are higher this morning, with the Chicago May contract up 18-1/2 cents at 10.70, the KC May contract up 13-1/4 cents at 11.20, and the Minneapolis May contract is up 9 cents, trading 11.36-1/4. Weekly export inspections will be released later this morning. On Friday, the USDA raised US wheat carryout 25 mil bu due to lower exports, and there are some that fear as the Ukraine war continues less Black Sea wheat will be exported, which could increase US exports. The dry weather in the Southern Plains could help the May KC contract test 12.00. The market will now begin to focus on the USDA’s May report. We estimate managed funds were net buyers of 15,000 wheat contracts on Friday and to be net long 15,000 contracts. Dry weather continues in the southern Plains. Initial support for the May Chicago contract, should lie under the market near the 20-day moving average of 10.45, while nearby resistance is near 11.10.
CATTLE
The cattle market is called to open mixed.
Cattle futures finished mixed to end the week, as a strong close in grain markets rippled across the cattle complex. There was active cash trade in the North this week at mainly $138 to $140 live and $222 dressed, mostly steady with last week. Moderate to active trade developed in the South at $138 live which was also steady. The Choice cutout moved $2.61 higher last week, while Select decreased $1.12/cwt. Strong Easter and post-Easter feature demand supported higher Choice prices. Feeder market faded off early session strength as grain markets had a positive response to the USDA Supply/Demand report on Friday. Prices finished mixed on the Feeder board and showed some resiliency despite the strong grain price moves. May feeders are likely tied to the index, which gained .05 to 155.59, but is running at a discount to front month futures. Cattle prices are trying to battle, but a difficult week could pressure early next week. Cash will be king, and the market needs to see those price firm. Charts are still weak overall and are still very susceptible to a test of the recent low.
HOGS
The hog market is called to open mixed.
Hog futures finished mostly higher, as a overall quiet trading session saw some end of the week profit taking and position squaring for the end of the week. Based on the Friday close, .05 higher to 103.16, pork values trended softer in general during the week, dropping $3.24 from the close on Monday, further limiting hog prices during the week. The cash market trade was softer this week. National Direct closing values on Friday were 2.57 lower at 97.73, and the 5-day average is at 100.53. The Lean Hog Index was lower, losing 0.48 to 100.68. On the week, the index traded 2.68 lower. Technically, hog charts look challenged, and could be poised to test lower levels. The trend lower in cash prices and a softening retail market only add to the concern going into the week.
Author
Scott Masters