Corn futures are firm this morning on gains of as much as 5-1/2 cents in nearby May corn to 3.52-3/4, and 3-1/2 cents to 3.68-3/4 in Dec. More strength in stock index futures, crude and lower dollar overnight is giving commodity markets an infusion of short covering and buying interest mid-week, but ongoing demand concerns due to ethanol weakness and softening cash market may limit rallies. Weekly Ethanol Stats will be out today, exports tomorrow. Look for the markets to continue to take their cues from the stock market. So far, the tide appears be turning somewhat with some of the virus headlines coming more positive than what we’ve been seeing, at least as far as a stimulus package.
Soybean and soy oil futures are also firm this morning and meal mixed. The soybean market continues to show strength, rallying a dime overnight underpinned by the latest surge in the soybean meal market, which has since shown signs of stalling. May beans rallied to 8.97 overnight before falling back to 8.90. Nov got to 8.85-1/2 before pulling back to 8.80. Concerns around Covid-19 issues and South America are factors for the complex. Possible bottlenecks in Brazil and Argentina restricting the shipments of farm goods in some towns may keep support under soybeans and soybean meal, as well as the dollar retreating against a rising Brazilian real.
Wheat futures are called mixed to higher. May Chi wheat was able to extend Monday’s new highs for the move overnight on gains of 6-3/4 cents to 5.68-1/4 after stalling yesterday. May KC was up 3-1/4 to 4.94; and May Mpls was up 3-1/4 to 5.22. Buyers remain active and supportive in the wheat markets amid global demand from millers for flour to rebuild bread and pasta supplies. Technically, winter wheat contracts are back above their respective moving averages in a bid to challenge 2020 highs set in January.
Live cattle futures are called higher on follow through if the market can hold yesterday’s gap on the day chart. Cattle futures are trying to play catch-up with the explosion in retail prices, as choice carcasses are at their highest levels since 2015. The cash market is expected to push higher as well, bringing support to an oversold market and building on the limit-move jump at the opening bell on Tuesday that stuck throughout the session’s close.
Lean hog futures are called mixed to higher on the steady advance seen in the cash market and recent hike in pork cut-out values. Spillover strength from live cattle markets also provide support for lean hogs. Related protein markets are supported by retail strength trying to secure supplies to restock retail meat spaces in the U.S. and globally. There is some caution for the technical bullish traders as stochastics rise into overbought territory.