Ahead of the Open | March 18, 2024
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 to 3 cents lower.
Wheat: SRW 8 to 10 cents higher; HRW 4 to 6 cents higher; HRS 4 to 6 cents higher.
GENERAL COMMENTS: Wheat futures led to the upside overnight with corn posting mild gains. Soybeans favored the downside though pared losses into the break. Outside markets were supportive overnight, as U.S. equities and front-month crude oil futures favored the upside overnight and the U.S. dollar index traded near unchanged.
Frost and freezes are expected in most areas from the Midwest to the interior Gulf Coast states and Southeast Tuesday morning. Some damage to wheat is expected, although permanent losses to wheat production should be highly localized, according to World Weather Inc. The forecaster notes South American crop moisture stress will be greatest in southern Bolivia, Paraguay, southwestern Brazil (Mato Grosso do Sul, western Parana and immediate neighboring areas) as well as far northern Argentina. Partial relief is expected in these areas over the next 10 days to two weeks, but some of the moisture deficit will remain. Far southern Brazil, eastern Argentina and Uruguay will continue wet during the first half of this week, with some localized flooding possible.
Ukraine’s corn plantings this year are expected to fall 4.5% to 3.863 million hectares, according to the first forecast from the ag ministry. It says farmers could also decrease plantings of spring wheat and sunflowers but could increase area sown to spring barley and soybeans. The corn sowing outlook is better than expected in February when a survey compiled by the ag ministry showed an expected decrease of 9%. Ukraine used to be the world’s largest producer and exporter of sunflower oil, however, a decrease in sunoil prices could cause producers to cut the area sown for sunflower to 5.292 million hectares from 5.307 million last year, the data showed.
Congress faces a midnight deadline on March 22 for a second package of fiscal year (FY) 2024 budget bills. Lawmakers drafted a full-year FY 2024 Homeland Security appropriations bill after last-minute negotiations, prompted by White House intervention. A full-year FY 2024 Homeland bill, expected to exceed the current year’s funding level, provides a platform for bipartisan negotiations, potentially incorporating additional funding for border and immigration-related accounts within nondefense limits through measures like rescissions and emergency spending designations.
CORN: May corn futures posted modest gains overnight. Resistance stands at $4.41 then the 40-day moving average at $4.42 1/4. Further buying targets $4.45. Meanwhile, support stands at $4.35 3/4, the 20-day moving average, then $4.30.
SOYBEANS: May soybean futures have traded largely sideways for four-sessions, lacking conviction either way. Bulls are seeking to overcome resistance at $11.98 1/4, quickly backed by the psychological $12.00 mark, then last week’s high of $12.17 1/2. The 40-day moving average at $11.95 1/2 remains a key pivot. Support stands at $11.91, the 10-day moving average at $11.84, then $11.79 1/4.
WHEAT: May SRW futures posted corrective gains overnight. Resistance stands at $5.42, with further backing from $5.47 1/2. Bulls have posted a higher low versus last week’s low, the first step in reversing the recent downward trend. Support stands at $5.28 1/2 then the contract low of $5.23 1/2.
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though continued technical weakness could limit gains after the open. Last week’s surge in the cash market, which could challenge the record high from mid-2023, is likely to support the futures market, as the spread between cash and futures has continued to narrow and is nearing par. As the cash cattle market continues to firm, April futures have struggled to work higher since mid-February. Rising wholesale beef prices have encouraged packers to raise their bids in the cash market. Choice cutout rose $1.12 to $311.90 on Friday, the highest mark since September 2023. Select rose 71 cents to $302.40, the highest level since June of last year.
HOGS: Lean hog futures are expected to open with a firmer tone, in a continuation of last week’s strength. April futures surged late last week on continued strength in cash fundamentals, though the contract is nearing uptrend line resistance, which capped losses from January until its failure in early March. That could limit gains after the open. The CME lean hog index is up another 15 cents to $82.34 (as of Mar. 14), increasing the premium the April contract holds to the index to $4.585. Wholesale pork prices continue to show impressive strength, as movement rebounded from a mid-week lull to 303.7 loads. Cutout firmed 22 cents to $93.47, as gains in loins and butts offset losses in all other cuts.
