CORN
Corn futures traded narrowly mixed overnight around the $7.00 mark in nearby May, 6.50 in July and 5.45 in Dec. Prices have settled down after a wild start to the week that included new highs. May is up about 50 cents for the week, July 15 to 20 cents and Dec is actually down a nickel. Cash is trading at a premium to July futures and is supporting the July/Dec spread. Corn planting may be as far as 40% to 50% complete, suggesting an above average 2021 crop, barring weather problems, thus Managed Money’s huge net long position may need to come down. The funds sold an estimated 2,000 corn contracts on Thursday and are net long an estimated 492,000 contracts. Overnight, South Korean feed groups bought 196,000 tons of optional-origin corn. In South America, weather forecasts are fluid. Notable moisture relief to interior southern Safrinha corn areas of Brazil is still unlikely in at least the next two weeks. Last evening’s GFS model run did suggest that meaningful rain gets up into part of this area May 12 – 14. Conditions in Argentina are still expected to be favorably mixed the next two weeks.
SOYBEANS
Soybeans are moderately lower this morning led by an 11 cent drop in nearby May to 15.31-1/2. For the week, the contract is about even, and down significantly from Tuesday’s intra-day contract high of 16.08-3/4. July is down 6 cents to 14.97-1/4 versus Tuesday’s blow-off top on the chart at 15.74-3/4. Nov is off 2-1/2 cents to 13.16-1/4 after attaining 13.84-3/4 this week. May soyoil is unchanged. On Monday, USDA March Soybean crush should be near 188 mil bu vs last year’s record 192. End of March soyoil stocks should be near 2.17 bil lbs vs 2.306 last month and 2.327 ly. U.S. domestic cash basis remains firm due to positive crush margins, and talk of U.S. soybean Imports from Brazil may be weighing on price sentiment. Chinese Ag futures (September) settled down 63 yuan in soybeans, down 21 in Corn, down 23 in Soymeal, down 78 in Soyoil, and down 60 in Palm Oil. Malaysian palm oil prices were down 49 ringgit at 3,902 (basis July) at midsession. Overnight, Tunisia bought 27,000 tons of option-origin veg oils.
WHEAT
Wheat futures were choppy overnight. July CBOT futures are down 4 cents to 7.25, in the lower half of this week’s 58 cent trading range between the new contract high of 7.69-1/2 and 7.11-1/2. For the week, the contract is up 13 cents. July KC wheat is down 7 to 6.87-1/2, nearly a nickel higher than last Friday’s settlement. July MPLS wheat is up a penny to 7.45-1/2, up 20 cents on the week, and mid-range of this week’s trading range between the contract high etched at 7.73-3/4 and the low of 7.23-3/4. Wheat is buoyed by weather’s impact on final crop ratings and its value compared to corn. Last evening’s GFS model run was mostly similar to the midday GFS model for the Northern Plains and showed occasional shower activity in the region over the next two weeks that would still leave a need for more moisture. Overseas, Ukraine has sown a total of 2.92 million hectares of spring grains as of April 29, or 39% of the expected area, agriculture ministry data showed on Friday. This year’s spring sowing started a few weeks late due to lingering cold weather in most of the country. The overall grain area is likely to total 15.5 million hectares this year, including 7.6 million hectares of spring grains, the ministry has said.
CATTLE
Cattle calls are mixed. Futures finished mostly higher on Thursday while continuing to consolidate. June futures have traded around the 116 level the past six sessions, and are holding above the April 26th low of 114.550. A break below would open the door for further downside movement. April futures expire today, and may keep the market choppy into the weekend. Weekly export sales of beef last week were a consistent 23,600 MT, with South Korea, Japan and Mexico as the top buyers last week. Export shipments were at 18,700 MT up 2% from the 4-week average. Carcass values were stronger, as Choice carcasses gained 1.26 to 293.76, and Select .79 higher to 279.79 on moderate demand of 125 loads. Cash trade is being limited by strong slaughter numbers, estimated at 481,000 head, steady with last week. Last week recorded the largest weekly kill totals for 2021. Cash trade recorded more direct sale business, ranging for $118-120 and dress trade at $189-191, both steady to softer than last week. Despite the strong packer margins, the large supply of available cattle keeps the leverage in the hands of the packer, limiting the cash market.
HOGS
Hog calls are for steady to higher trade. Futures finished lower on Thursday, giving back the gains from Wednesday. Prices have softened to test near-term support, amid some concerns that the cash market may be nearing a top. The Lean hog index eased for the first time since early February, losing .38 to 107.01. This was the fifth time the index traded lower since the start of the year. Weekly Pork export sales were 35,600 Mt, up 59% from the 4-week average as Mexico, Japan, and South Korea were led the buy side of pork last week. China did add 2,000 MT of sales, but the light total may have helped make the market nervous. Export shipments were a marketing year high, 58,800 MT, reflecting the strong product movement. Pork carcasses were strong at midday, gaining 4.10 to 112.31 on 118 loads before losing that strength on the close, finishing .66 lower to 107.55. Prices have been trending slightly softer this week, and the weak close could pressure prices on the open tomorrow. The trend in hog prices has been higher this week overall, but a strong close into the weekend will be key for direction of prices next week.
Author
Matthew Strelow