Corn futures were higher overnight after China injected a sizable amount of money into their economy over the weekend, thus improving their stock market to begin the week. Corn contracts are 3-1/2 higher, but still tightly range-bound. We’re still seeing cases of coronavirus rise, but maybe not at the increasing rate of late. This news will continue to be closely monitored by the market. Brazil announced that their economy could suffer if the virus is prolonged. Meanwhile, USDA will hold their outlook forum on Friday, and with funds short the market, overnight market strength may be a signal that we’ll see some short-covering going into the the crop forecasts. Strength in cash markets does remain supportive underneath corn futures, but long-term projections with a potential carryout for 2020/21 at 2.7+ million bushels may keep bulls cautious. Weekly Export Inspections will be out today.
Soybean futures were up 4 cents overnight. A weak close on Friday’s trade, influenced by on-going South American harvest and a weakened Brazilian real vs U.S. currency is noted, but the latest newswires report that China is to offer trade war tariff exemptions on almost 700 U.S. farm, medical and energy products amid coronavirus, including soybeans, pork and beef.
Wheat futures legitimately rallied overnight, gaining 10 to 12 cents after showing technical weakness, with Chi wheat closing to their lowest point in nearly two months on Friday’s trade. Global supplies stay relatively heavy with new sources of demand and long liquidation may still be active in the wheat market this week.
Cattle futures are called firmer. As far as cash this week, most asking prices will be $3-5 higher than last week’s cash trade mostly at $119/cwt live with the cattle market pricing in some potential demand as part of the Phase 1 deal with China. Strong movement in retail values on Friday and an improved technical picture on the charts reversing off of last week’s lows may bring some additional short covering as we move into the weeks ahead.
Hog futures are called mixed. Hog futures posted a week of consolidation last week, after a strong turn on the charts the prior week. Chinese demand will continue to be a key focal point for the hog market. The large slaughter numbers in the U.S. Pork production cycle remains at large levels, and without strong demand, the market may have a difficult time finding some more upward mobility.