CORN
The corn market opened lower to begin the overnight session and the May contract is trading down 3-3/4 cents at 7.54-1/2 after trading on both sides of unchanged in a 5-cent range, and the December contract is trading at 7.06 down 3 cents. For the week the May and December contracts are up 19-1/2 cents and 18 cents respectively. Today the USDA will release their monthly WASDE report today at 11a CDT. Estimates for 21/22 US corn ending stocks are 1.415 billion bu. versus 1.440 billion bu. last month. CONAB estimates Brazil’s 2022 corn crop at 115.6 mmt versus their previous estimate of112.3 mmt. They also estimate Brazil’s Safrina corn crop at a record 88.5 mmt up 46% from last year. Some estimate Argentina’s corn crop to be near 49 mmt versus the USDA’s last estimate of 53 mmt. Support for the May contract is near the 10-day moving average of 7.50, while nearby resistance is near 7.70. The May contract also continues to lose ground to the July as the Index roll has begun with funds rolling their long positions from the May. The May/July spread is now near levels seen just before the Ukraine war began. While the December contract continues to be supported by the lower-than-expected USDA 2022 acreage estimate and wet weather in the eastern corn belt which is slowing plantings.
SOYBEANS
The soybean complex is trading higher this morning with the May Soybean contract up 5-1/2 cents at 16.51 while the new crop November contract is up 4-1/4 at 14.70-1/2. Both products are firmer this morning with the May soybean meal contract at 461.10 up 90 cents, and May soybean oil is up .03 cents at 73.05. For the week the May and November soybean contracts are up 68-1/4 and 63-3/4 cents respectively. Today the USDA will release their monthly WASDE report today at 11a CDT. Estimates for 21/22 US soybean ending stocks are 262 million bu. versus 285 million bu. last month. CONAB estimates Brazil’s 2022 soybean crop at 122.4 mmt, 3 mmt lower than last month, and some believe Argentina’s soybean crop is closer to 39 mmt. Rumors remain of an increase in China’s purchases of US soybeans, though China’s crush is down 10% season to date versus USDA’s last estimate of down 6%. Support should lie under the market near the 50-day moving average of 16.24, while nearby resistance is near the 20-day moving average of 16.58.
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WHEAT
All three wheat classes are beginning the day up from the overnight session with the May Chicago contract up 3 cents at 10.23. May KC is up 5-1/4 cents at 10.76, and May Minneapolis wheat is up 4 cents at 11.03-1/4. For the week, May Chicago is up 38-1/2 cents, May KC is up 63 cents, and May Minneapolis is up 38-1/4 cents. Today the USDA will release their monthly WASDE report today at 11a CDT. Estimates for 21/22 US wheat ending stocks are 656 million bu. versus 653 million bu. last month. If the Ukraine War continues, the USDA will have a big challenge in May reconciling the first World 2022/23 supply and demand estimates. As lower Black Sea exports may shift demand to the EU and other exporters. Though Russia’s FOB values are difficult to determine, they continue to be the lowest export prices. Questions remain concerning Black Sea exports and whether as much as 10 mmt may get shipped.
CATTLE
The cattle market is called mixed to higher on the open.
Cattle futures finished mixed to mostly higher on Thursday, as additional short covering brought some more price recovery to the markets, especially deferred contracts. The cash market has stayed light this week, with little business again on Thursday, and likely wrapped up for the week. On the week, the market has marked most trade at $138 and $222 dress trade, fully steady with last week. Boxed beef values have been trading firmer, and close firmer on Thursday with Choice gaining 0.36 to 271.40 and Select adding .17 to 261.22 on movement of 94 loads. The USDA released weekly export sales on Thursday morning and new net sales of 14,000 MT for 2022 were down 39% from the previous week and 43% from the prior 4-week average. Japan, South Korea, and Mexico were the top buyers of U.S. Beef last week. Feeders saw bear spreading with good buying strength in the deferred contracts. May feeders are likely tied to the index, which gained .05 to 155.59, but is running at a discount to front month futures. A firm close in the corn market weighed on the front month feeder contracts. The action of grain markets after today’s USDA Supply & Demand report will likely be the key to price action for livestock markets going into the weekend. The markets are trying to put in a turn, and some of the price action today maintained a turn in the trend. Charts are still weak overall and are still very susceptible to a test of the recent low.
HOGS
The hog market is called to open mixed.
Hog futures finished mixed as the premium of the futures market to the cash market weighed on the front month contracts, as noticeable bear spreading drove prices on Thursday. The cash market trade was firmer in midday trade. National Direct midday values were .85 higher at 100.23, and the 5-day average is at 100.36. The Lean Hog Index was lower, losing 0.58 to 101.08. The Apr contract expires on the 14th and was supported by its discount of 2.030 to the cash index. Pork carcass values were firmer at midday, jumping 7.79, but failed to hold those gains, dropping 1.26 to 103.11 at the close, on a load count of 251 loads. The weak close will likely pressure the open in the hog market. Weekly export sales were improved with new net sales of 41,200 MT for 2022 were up 49% from the previous week and 44% from the prior 4-week average. Mexico, China, and Japan were the top buyers of U.S. pork last week. The hog market got some favorable news on Thursday, but it was still difficult for front-end prices to rally. The deferred strength likely reflects the projected overall tight hog supplies, and strength in long term grains. Overall, the market is still searching for a low.
Author
Scott Masters