Corn: Steady to 1 cent lower
Soybeans: Steady to 1 cent higher
Wheat: 3 to 5 cents higher
After Monday’s washout, soybean and wheat futures mildly favored the upside overnight amid light short-covering. We anticipate light followthrough corrective buying at the start of daytime trade. But there’s risk of additional fund long liquidation if corrective buying is limited.
Forecasts signal dry conditions will be seen across central Argentina through Thursday. There is a chance for rains Friday and Saturday, though the overnight European weather model backed off rains versus previous runs. The chance for late-week rains will likely limit buying and could trigger selling in soybeans.
HRW wheat crop conditions declined in Kansas and Texas over the past week, according to state-level data released Monday, which should help encourage corrective buying. Oklahoma wheat conditions were mixed over the past week, with the portion of crop rated “good” to “excellent” and “poor” to “very poor” both increasing.
Corn futures struggled to sustain corrective buying overnight, though a daily sale of 110,000 MT of U.S. corn to Peru for 2017-18 may boost futures this morning.
Live cattle futures are expected to face followthrough selling after closing moderately to sharply lower and low-range yesterday. Concerns about demand not keeping pace with supplies are causing funds to liquidate long positions. But the nearly $8 discount April live cattle futures are trading in relation to last week’s average cash cattle price should limit selling and may encourage corrective buying.
Lean hog futures are also expected to face followthrough selling this morning after heavy pressure and a low-range close Monday. Yesterday’s price action resulted in a contract low for April hogs, which dropped the lead contract $2 below where the cash index will be quoted today (for March 16). While traders won’t likely want to increase the discount to the cash index much more, cash hog prices were lower Monday and are expected to remain soft today amid ample market-ready supplies.