Ahead of the Open | April 12, 2022

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GRAIN CALLS

Corn: 6 to 8 cents higher.

Soybeans: 12 to 18 cents higher.

Wheat: 11 to 21 cents higher.

GENERAL COMMENTS: HRW wheat futures climbed to a five-week high overnight and corn and soybeans also gained on continuing concerns a protracted Russia/Ukraine conflict will tighten global supplies. Malaysian palm oil futures rose to the highest price in nearly three weeks after the country’s inventories at the end of March fell the lowest in a year, while Nymex crude oil rose more than $3. U.S. stock index futures point to a mostly firmer open, while the U.S. dollar index is slightly weaker this morning.

The U.S. consumer price index surged 8.5% during March from year-ago, the highest annual increase since December 1981, according to a Labor Department. Excluding food and energy, the CPI increased 6.5%, in line with expectations but still the highest annual rate since August 1982. The Federal Reserve’s efforts to rein in soaring prices likely means more aggressive interest rate hikes this year following an initial increase last month.

U.S. winter wheat conditions improved slightly, with USDA rating 32% of the crop good-to-excellent as of April 10, up from 30% a week earlier. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 5.2 points to 277.8 and the SRW crop rose 3.2 points to 345.3. At those levels, the CCI ratings are still 52.1 points below the five-year average for HRW and 11.2 points below for the SRW crop.

U.S. President Joe Biden will unveil plans today to extend the availability of higher biofuels-blended gasoline during summer to curb soaring fuel costs and to cut reliance on foreign energy sources, senior administration officials said. The move will allow Americans to keep buying E15, a gasoline that uses a 15% ethanol blend, from June 1 to Sept. 15.

France’s ag ministry expects the country’s all-wheat planted area to fall 3.9% from year-ago to 4.79 million hectares. Winter wheat acreage at 4.77 million hectares would be down 4.0% from last year, while spring wheat acreage at 22,000 hectares would be down 0.2% from last year. The estimates were based on data as of April 1, before a cold snap that hit many parts of the country, the ministry said.

South Korea purchased 207,000 MT of optional origin corn. Japan is seeking 114,645 MT of milling wheat from the U.S., Canada and Australia in its weekly tender. Egypt tendered for an unspecified amount of European origin wheat.

 

CORN:May corn traded within yesterday’s range overnight but remained near the five-week highs posted yesterday. December corn reached $7.28 1/2, a contract high for the third straight session. New-crop prices may gain support from concerns wet, cool weather in the Midwest will delay corn planting. Late yesterday, USDA reported 2% of the U.S. corn crop had been planted as of April, unchanged from the previous week and one percentage point behind the five-year average for that date.

SOYBEANS: May soybeans traded within yesterday’s range overnight after falling 33 3/4 cents yesterday to $16.55 1/4. Strength in Malaysian palm oil and a rebound in crude oil should support the soy complex today.

WHEAT: July SRW wheat overnight rose as high as $11.25, the contract’s highest intraday price since $11.39 3/4 on March 22. July HRW reached $11.77 3/4, the highest since March 8.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE:Live cattle futures may gain support from strength in wholesale beef, which suggests improving retail demand as the spring grilling season nears. Choice cutout values rose $1.64 yesterday to $272.11, the highest in nearly two months. Movement was relatively light at 82 loads. The average cash cattle price last week was $138.82, down 50 cents from the previous week. That’s the fifth consecutive week the cash market has held within a roughly $1 trading range. Most traders expect the cash market to remain flat this week, though some anticipate a mildly firmer tone. Feeder cattle will face pressure from strength in corn.

June live cattle rose 97.5 cents yesterday to $134.80. May feeder cattle gained 52.5 cents to $159.90.

HOGS: Lean hog futures likely will continue to be burdened by eroding cash fundamentals, though wholesale market strength may limit weakness. The CME lean hog index is down another 43 cents today and below the $100 mark for the first time since March 9. Despite the discount to the cash index, buying in April hog futures is unlikely to surface unless the cash index turns higher. Pork cutout values jumped $3.48 yesterday to $106.64, the highest daily average since March 31. Movement was relatively light at 254 loads.

June lean hogs rose 45 cents yesterday to $115.025, while April hogs fell 60 cents to $98.425.

 

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