CORN

Corn futures were narrowly mixed overnight inside Thursday’s trading ranges.  The new high for Dec stands at 4.19 after rallying 17 cents this week to the highest level since July 25, 2019.  Funds remain active buyers and open interest is at its highest since November 2019.  Stronger-than-expected Weekly Export Sales have pushed cumulative sales to 48% of the USDA forecast for the 2020/21 marketing year versus a 5-year average of 30.9%.  Overnight newswires reported: China’s government is expected to issue more import quotas and buy millions of tonnes of additional corn in the new crop marketing year, three industry sources said, amid a surge in animal feed demand and tightening supplies.  With the Relative Strength Index (RSI) now over 70, the market is becoming technically overbought.  The next area of resistance stands at around 4.20-1/4 and then the near-term upside objective of 4.23-3/4.

SOYBEANS

Soybean futures did trade a 10 cent trading range overnight inside Thursday’s range, but are mostly unchanged heading into the day-session.  Nearby soybean futures made new contract highs on gains of 30 cents this week to 10.85-1/4. The next resistance area is 10.95-3/4.  Talk that US soybean exports to China could exceed the record 36 mmt in 2016/17 and any South America weather problems could send futures even higher.  World palmoil and sunoil prices are surging higher on supply concerns. This is helping soyoil futures, which eased slightly overnight.

WHEAT

Wheat futures were up a nickel overnight as the dollar relinquishes Thursday’s gains.  It’s been a volatile week of trading for these weather markets with clear topping signs appearing on the charts.  Dec Chicago futures are up about 3 cents for the week, KC down 3 cents; And, Mpls up 19.  Increased rains in global dry areas could trigger further long liquidation, while a return to a dry pattern especially in the U.S. and Russia could push futures above recent highs.  For now, the winter wheat contracts are exhibiting chart fatigue into the weekend.

CATTLE

Cattle futures calls are mixed after consolidating on Wednesday and then resuming the down trend in live cattle yesterday.  This week’s action is showing us that the market is still searching for a near-term low.  Look for more choppy trade ahead of this afternoon’s USDA Cattle on Feed report.  Trade estimates are for ‘On Feed’ to come in at 103.2%; ‘Placements’ 102.4%; And, ‘Marketings’ at 105.8%.  Cold storage may offer some support. Total pounds of beef in freezers were up 3% from the previous month but down 1% from last year.  Cash is very quiet and may be done for the week at around $106/cwt, down $2 to $3 from last week; And, carcass cut out values, trending lower the last 2 weeks may be trying to find some stability. 

HOGS

Lean hog calls are steady to higher as the trade digests Thursday’s technical breakdown on the charts versus friendly Cold Storage numbers.  Dec failed to hold the 70.00 barrier this week which helped trigger long liquidation, thus plunging the contract limit-down, widening the discount to the Cash Index, and dragging the rest of the complex into triple-digit losses.  Feb and April hogs are down $5-$6 this week going into today.  The Cold Storage report showed frozen pork supplies were up slightly from the previous month, but down 22% from last year.  Stocks of pork bellies were down 20% from last month and down 39 from last year.  The tight pork supplies will be viewed as supportive to the market.

Author

Matthew Strelow