Corn futures were off a penny overnight and may be more prone to more weakness as coronavirus news weighs on market sentiment. The weak technical picture in corn after making new lows on Sunday night favors the bears and short fund position. Outside markets will continue to be a key momentum driver as the corn market looks for short-term direction. The dollar is firm and crude is making new lows for the move this morning, while the Dow looks to open mostly unchanged. Weekly ethanol stats will be out mid-morning, exports tomorrow, and First Notice Day for March futures on Friday.
Soybean futures were also off a penny overnight. Tuesday’s session saw some unexpected support as a drop in new coronavirus cases in China may increase purchases of U.S. beans over the next few months. However, the combination of competitive global prices and ongoing South American harvest may limit any short-term rallies. The bean complex, as a whole is likely stay choppy to lower in short-term action. Oil made a new low overnight and meal is looking to regain some price value.
Wheat futures continued to slump overnight while losing 2 cents. Prices did hold key support levels of the 50% retracement and 200-day moving average in Tuesday’s trade, but overall fundamentals, except for exports year over year, remain negative with ample wheat supplies and the dollar, though down for the week, generally strong and acting as a restrictive barrier.
Cattle futures are called steady to lower. Cattle futures in Apr finished more than 6.5% lower the past four days, as demand concerns weigh in cattle prices. Technical action looks extremely weak with prices poised to challenge contract lows from September.
Hog futures are called mixed. Strengthening retail values, as well as firm cash market, are acting counteractive of futures prices. Tuesday’s trading session brought some price stability despite strong weakness seen in cattle markets, and we are suggesting CALL option strategies to take advantage of the potential for an eventual price bounce.