Corn futures were down a penny overnight after rebounding nicely yesterday, and posting reversals on some contracts. However, corn is more of a follower rather than a leader gaining 4 to 5 cents, and with wheat and beans weaker overnight, corn is following suit heading into Wednesday’s session.
Soybean futures were down 2 cents overnight after trading higher on Tuesday, in part due to a lowered production forecast in Brazil. Yesterday’s technical picture looks a little brighter but one day does not make a turnaround in a market that is currently on a slippery slope. Usage remains solid but, despite a 113.4 mil ton Brazilian crop vs 115.4 mil last month, expectations for big inventories available out of South America as we enter spring will keep rally potential in check.
Wheat futures fell 6 cents overnight as short-covering activity slows. More could be on the way mid-week, though as renewed U.S./China trade talks turn spur thoughts of progress where China could be on a fast track amid a conclusion or an agreement could be reached within weeks. Winter wheat conditions are uneven with Texas seeing a 10 point drop in good-to-excellent readings and a rise from 6% to 30% in the poor-to-very poor categories, according to USDA.
Cattle futures are called steady to weaker on follow through after a very poor looking technical day yesterday with futures closing under the 21, 40, and 50-day moving average combined for the first time since late fall. Some contracts dipped to a one-month low. Look for volatility to continue as charts begin to look toppy, and muddy conditions prevail as storms batter Colorado to parts of Nebraska and South Dakota over the next several days.
Hog futures are called mixed. Solid gains yesterday, particularly in the front months would suggest the cash index has plenty of room to climb higher. However, the big premium that futures hold to the cash index would suggest there is limited near term upside.