Market Snapshot | March 2, 2023

Market Snapshot
Market Snapshot
(Pro Farmer)

Corn futures are a penny to 4 cents higher at midmorning.

  • Corn futures have turned higher on bargain buying and looming uncertainty around the extension Black Sea grain deal.
  • Russian Foreign Minister Seri Lavrov stated today the West is “shamelessly buying” the Black Sea grain deal, following yesterday’s comments from his ministry that Russia would only agree to extend the deal if the interests of its own agricultural producers were considered.
  • Feed mills in Asia are ramping up corn purchases from India as severe drought has reduced production in the country’s usual supplier, Argentina. Importers in Malaysia and Vietnam are booking around 200,000 MT of Indian corn a month, according to Reuters.
  • Today’s forecast is wetter overall for Argentina than what was advertised Wednesday, but many areas will not see significant improvements in soil or crop conditions as temperatures will be warm to hot during the next week and coverage of significant rain will not be widespread, according to World Weather Inc.
  • USDA reported corn export sales of 598,100 MT for week ended Feb. 23, which was down 27% from the previous week and 48% from the four-week average. Net sales for the week were near the low-end of the pre-report range of 500,000 MT and 1.0 MMT.
  • May corn has traded as high as $6.41 1/2, where initial resistance stands. Initial support is around $6.30.

 

May soybeans are around 19 cents higher, while May meal futures are more than $5.00 higher. May soyoil is around 90 points higher.

  • Soybeans are extending gains from the previous session as global supply concerns persist from drought-hit Argentina and flooding in Malaysia.
  • World Weather notes Paraguay and much of Brazil outside of some northeastern areas will see regular rounds of showers and thunderstorms through the next two weeks that will maintain favorable conditions for crop development while causing interruptions to fieldwork.
  • USDA reported soybean export sales of 360,700 MT, a marketing year low, for week ended Feb. 23. Net sales for the week were down 14% from the previous week and 25% from the four-week average. Sales were slightly above the bottom end of the pre-report range of 300,000 to 850,000 MT.
  • China’s weekly soybean crush dipped by 10.9% against the previous week to 1.65 MMT as relatively high meal stocks in addition with low soybean availability led to the suspension of operations at some plants, according to data from the Chinese National Grain and Information Centre.
  • Malaysian palm oil futures extended gains for the second straight session, underpinned by a weaker ringgit, flooding woes and as traders assessed India’s removal of duty-free import quotas for sunflower oil.
  • May soybeans have traded as high as $15.13, breaching resistance at $15.01 1/2 and $15.08 3/4. Initial support is around $14.90.

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Winter wheat futures are higher, with HRW leading the complex with 11- to 13-cent gains. Spring wheat is up 13 to 15 cents.

  • Winter wheat are posting notable gains despite a stronger U.S. dollar as recent comments around the Black Sea grain deal have reignited global supply concerns.
  • India, the world’s third largest wheat producer, will likely begin importing wheat to combat the expected effect of the El Nino weather pattern on the crop while stocks are currently low.
  • Temperatures will be warm enough in southern HRW wheat production areas to stimulate some more growth of winter wheat; however, unusually cold air in the second week of the outlook is still expected to temporarily stop this growth, states World Weather.
  • USDA reported wheat export sales of 284,100 MT for week ended Feb. 23, which was down 16% from the previous week, but up 39% from the previous four-week average. Net sales for the week were towards the low end of the expected pre-report range of 150,000 to 600,000 MT.
  • May SRW wheat traded above resistance at $7.15 3/4, additional resistance is at $7.21 1/2. Initial support remains at $7.03.

 

Live cattle are slightly lower, while feeders are posting moderate gains.

  • Live cattle are extending the previous session’s weakness as traders wait for higher cash cattle trade to be confirmed.
  • Cash cattle trade has been light so far, with prices reported around $1 higher in Iowa. The lack of cash activity has caused cattle futures to pause as traders wait on confirmation of higher prices in other states.
  • April live cattle continue to narrow their premium to the cash market.
  • Wholesale beef prices fell on Wednesday, with a $1.12 drop in Choice to $287.83 and a $2.82 decline in Select, taking the Choice/Select spread to $11.40.
  • USDA reported net beef sales of 8,100 MT for 2023 in week ended Feb. 23, which was down 48% from the previous week and 62% from the four-week average.
  • April live cattle are trading narrowly between the initial resistance at the 10-day moving average near $164.97 and initial support at the 20-day moving average of $164.57.

 

Hog futures are mostly firmer at midmorning.

  • Lean hog futures are marking gains as the cash index continues to rise seasonally and traders have recently narrowed premiums in the front end of the market.
  • The CME lean hog index is up 7cents to $78.58 as of Feb. 28. April lean hogs ended Wednesday $6.37 above that level. As the futures/cash relationship currently reflects about the normal seasonal rise from now until mid-April, traders shouldn’t look to narrow the premium much more.
  • Pork cutout value rose $1.18 on Wednesday to $85.54, led by a $4.50 increase in primal bellies.
  • USDA reported weekly pork export sales of 31,000 MT for 2023, which was down 40% from the previous week and 21% from the four-week average.
  • April lean hogs are pivoting around the 20-day moving average near $85.41. Initial resistance is at the 10-day moving average of $85.89, while support lies at $84.23.

 

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