CORN
Corn futures traded two-sided overnight inside Friday’s ranges. May corn is up 2 cents this morning to 5.79-1/4 and Dec is up 2-1/2 to 4.99 with Friday’s new contract high standing as a bullish target 5.03-3/4. On Friday, USDA reduced U.S. 2020/21 corn carryout to the average trade guess and raised 2020/21 corn feed use, 50 mil bu, FSI 25 mil bu and exports 75 mil bu. This reduced U.S. 2020/21 corn carryout to near 1.352 bil bu vs 1.502 last month and 1.919 last year. Many feel USDA is 100 mil bu too low in final domestic use and 200 mil bu too low in final exports. This could eventually lower final carryout closer to 1.052, suggesting more volatility and higher prices. In May, USDA will need to develop a U.S.2021/22 US corn balance sheet that could show lower total supply and similar demand that would point to a carryout below 100 bil bu. Weekly Export Inspections will be out later this morning followed by Weekly Crop Progress and Conditions reports after the close. Weather-wise, for the Midwest, rains with the weekend system will be finishing up by Monday morning and then things look to be fairly quiet for much of the rest of the week.
SOYBEANS
Beans were lower overnight. May was down 8 cents to 13.95 while slipping below the contract’s 50-day moving average to a fresh 1-1/2 week low. Nov beans lost 6-1/4 cents to 12.57. Technically, beans are showing signs of vulnerability based on stochastics’ momentum indicators crossing over bearish. The complex was mixed with meal firm and soyoil lower. Meal has been losing ground mostly on concern over Chinese demand. USDA dropped China soybean crush 2 mmt to 96, possibly due to ASF. Some feel China has control over ASF in the north but It is still spreading in the south. Soyoil should maintain some support on talk of increased biodiesel demand for jet fuel in the U.S. Overnight, Chinese Ag futures (May) settled down 113 yuan in soybeans, down 52 in Soymeal, down 100 in Soyoil, and down 216 in Palm Oil. Malaysian palm oil prices were down 41 ringgit at 3,726 (basis June) at midsession on higher production expectations. Malaysia’s March-ending palm oil stocks jumped more-than-expected to a four-month top, boosted by higher imports and production, but a surge in exports kept domestic supply in check, data from the industry regulator showed.
WHEAT
Wheat futures were on the defensive overnight, easing from a strong showing the latter half of last week. Open interest has begun to take over the July contracts versus May. July Chicago wheat was down 7 cents to 6.34. July KC fell 3-1/2 cents to 5.90-3/4; And, July MPLS was down 7-1/2 to 6.53-3/4. USDA raised U.S. wheat carryout 16 mil bu due, in part, to 10 mil bu lower imports and lower feed use, which is questionable. The Southern Plains in the 6-10 day period sees the rains moving in Thursday night to spread through much of the region Friday. Temps will run below average in all areas for the next ten days, including sub freezing temps in all but the SE 1/3rd of KS and eastern 2/3rds of OK and TX. Weekly Export Inspections will be out later this morning followed by Weekly Crop Progress and Conditions reports after the close.
CATTLE
HOGS
Hogs are called steady to higher as tight inventory, strong demand, and expectations for continued exports all provide price strength while the market probes for a top. April futures will expire on Friday, and that may keep the front month choppy. The Lean Hog Index gained .47 to 100.94 on Friday. For the week, the index gained a strong 2.44 and closed higher for the eleventh consecutive week. April futures is trading at a 2.53 premium to the index, and with expiration this week , upside potential could be limited. Futures finished mixed to mostly higher to end the week last week, but prices slid off session highs on some profit taking going into the close. Pork carcasses closed higher on Friday, gaining 2.17to 113.74. The load count was moderate at 329 loads. Since Monday’s close, pork carcasses were nearly $4.00 higher by Friday’s close.
Author
Matthew Strelow