Corn: Steady to 1 cent lower
Soybeans: 1 to 4 cents lower
Wheat: 5 to 8 cents lower
Grain and soybean futures favored the downside overnight, with HRW wheat futures pacing losses. We expect similar price action at the start of daytime trade, though it wouldn’t surprise us to see grain and soybean futures attempt a push to the upside at some point today.
Slight improvement in Texas and Oklahoma winter wheat crop ratings gave traders a reason to take some profits out of the long side of the market overnight. But the HRW crop still faces struggles, with 50% of the crop in Kansas, 77% of the Oklahoma crop and 64% of the Texas crop rated “poor” to “very poor.” Forecasts offer little hope for meaningful moisture improvement in the region through spring.
Corn and soybean futures also faced light profit-taking overnight, despite ongoing Argentine crop struggles. South American Crop Consultant Dr. Michael Cordonnier lopped another 2 MMT off his Argentine soybean crop peg and 1 MMT off his Argentine corn crop forecast, dropping them to 45 MMT and 35 MMT, respectively. Forecasts call for warm, dry weather to persist across central Argentina this week, though there is a rain event expected to arrive this weekend and last into early next week.
USDA announced a daily sale of 120,000 MT of soybeans to China for 2017-18.
Cattle futures rallied into the close Monday, which sets the market up for followthrough buying this morning. Boxed beef prices firmed Monday and packer margins are back solidly in the black. That gives traders some hope cash cattle prices will firm this week after recent price pressure. Even with yesterday’s gains, April live cattle futures finished around $3.50 below last week’s average cash cattle price in the Plains, giving traders incentive to narrow up that spread.
Lean hog futures also finished strong yesterday and are in line for followthrough buying this morning. The cash market firmed Monday, with the national direct price rising 27 cents and even a little stronger price in the important western Corn Belt. Plus, the pork cutout value firmed $1.27. With packer margins solidly in the black and snow-covered roads likely to slow hog movement in some locations, cash hog bids are expected to be firmer again this morning. But April lean hog futures are premium to the cash index again, which could limit buyer interest.