Ahead of the Open | March 25, 2024
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 3 to 5 cents higher.
Wheat: SRW 4 to 6 cents higher; HRW 3 to 5 cents higher; HRS 3 to 5 cents higher.
GENERAL COMMENTS: Corn traded in a tight range overnight while soybeans and wheat favored the upside. Volatility is likely to remain limited in corn until Thursday’s USDA reports. Outside markets were relatively quiet overnight as front-month crude oil futures traded near last week’s lows and the U.S. dollar index saw modest corrective selling.
Eastern Argentina, Uruguay, Paraguay and southern Rio Grande do Sul, Brazil, will receive little to no precipitation this week, according to World Weather. Net drying is also expected in central Brazil from southern and western Mato Grosso do Sul and western and northern Parana. Brazil rainfall in Mato Grosso, Tocantins and Goias has been reduced slightly from that advertised Friday for the coming 10 days.
Russia’s agricultural watchdog proposed the redistribution of quotas among grain exporters in case of systematic failures on the part of exporters, such as Russia’s RIF trading house. Earlier this month, the watchdog said it had noted a large number of complaints about grain shipped by RIF not meeting international standards.
Washington will be quiet this week as the Senate and House are our for a two-week Easter recess. Following months of negotiations to fund the gov’t, President Joe Biden on Saturday signed a $1.2 trillion spending bill that will provide funding through the rest of the fiscal year, while also increasing defense spending and setting spending guidelines for several government agencies. The economic calendar for the week includes key indicators such as the personal consumption expenditures price index on Friday, which is the Fed’s preferred measure of inflation. The final estimate of fourth quarter U.S. GDP will be released on Thursday. It’s a heavy week for agricultural data, with USDA’s Prospective Plantings, Quarterly Grain Stocks and Quarterly Hogs & Pigs Reports all out on Thursday. Markets are closed for Good Friday, while government offices will be open on Friday.
CORN: May corn futures traded in a narrow range overnight. Gains continue to be capped by the 40-day moving average at $4.41 1/2. Additional buying would find resistance at last week’s high of $4.45 3/4. Meanwhile, support comes in at $4.37, last weeks low of $4.34, then $4.30.
SOYBEANS: May soybean futures posted modest gains overnight. The 40-day moving average, currently at $11.96, stands as initial resistance. Further buying targets the psychological $12.00 mark, then $12.12. Support stands at the 10-day moving average at $11.93, then $11.87.
WHEAT: May SRW futures saw followthrough buying overnight. Bulls are eyeing downtrend line resistance at $5.62, which is backed by the 40-day moving average at $5.67 1/4. Support comes in at $5.54 3/4 then the 20-day moving average at $5.53 1/2. Further selling finds support at $5.45.
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open lower following Friday’s bearish Cattle on Feed Report. The report showed the March 1 feedlot inventory up 1.3% from year-ago, as placements jumped 9.7% in February while marketings increase 3.4%. The placements figure will put pressure on deferred live cattle futures. Cash cattle trade averaged $189.52 prior to the report, which would top the prior record if gains were sustained through trade on Friday. April futures continue to face stiff resistance at $188.75, with trade early this week likely indicating whether a near-term top is in place. Wholesale beef prices turned lower on Friday, as Choice cutout fell $3.01 to $310.72 and Select dipped $2.26 to $301.47, while movement was light at just 85 loads.
HOGS: Lean hog futures are expected to open lower despite narrow premiums to the CME lean hog index. The index is up a nickel to $83.59 (as of Mar. 21), extending the seasonal climb since the beginning of the year. The relative weak daily gain likely gives traders confidence that their bet of a moderate gain between now and the April contract’s expiration in mid-April will hold true, as the premium held is down to 98.5 cents. Wholesale pork prices reversed recent weakness, rising $1.30 to $93.38, led higher by a $11.42 jump in ribs. Movement was relatively light at 232.13 loads, with movement failing to clear 300.0 loads on any of the days last week, signaling slowed retailer demand, which could weigh on futures as well.
