Ahead of the Open: Profit-Taking Ahead of the Weekend

Posted on 03/09/2018 8:02 AM

Crop calls

Corn: 1 to 2 cents lower
Soybeans: 9 to 13 cents lower
Wheat: 4 to 6 cents lower

Traders took profits out of the long side of the grain and soybean markets overnight and futures ended low-range. As a result, we expect selling pressure to resume at the start of daytime trade.

While Argentine crop estimates continue to decline, there are some rains in the forecast. Rainfall is expected to be erratic, especially over the driest areas during the next seven days. But the longer-term outlook continues to signal better rain chances the second half of the month, with the driest areas potentially in line for their best rains of the growing season. Traders will watch midday weather models closely as they position themselves ahead of the weekend.

Some fresh demand news may help limit selling somewhat. USDA reported daily sales of 183,000 MT of soybeans to China, 205,000 MT of soybeans to an unknown destination and 260,000 MT of corn to an unknown destination – all for 2017-18 delivery. 

Livestock calls                                                                      

Cattle: Choppy to firmer               
Hogs: Choppy to firmer

Cattle and hog futures are due for a corrective bounce and finished well off session lows Thursday. As a result, we anticipate a mostly firmer open this morning. But with a cloud of uncertainty on the trade front hanging over the markets and the path of least resistance being down, we aren’t confident corrective buying will prevail. Despite the need for a correction, fresh selling could develop, especially if there’s a firmer start in the livestock markets this morning.

Cattle futures should get a boost from cash cattle prices that firmed to $127 to $128 yesterday after sales at $126 initially this week. April live cattle futures ended more than $4 below the bottom end of this week’s cash range Thursday.

April lean hog futures hold a modest premium to the cash index. With cash hog bids softening yesterday, it’s unlikely traders will want to push the lead contract too much above the index.  

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