Ahead of the Open: Wheat Pressured By Improved Weather Forecasts

Posted on 04/16/2018 7:54 AM

Crop calls

Corn: 1 to 2 cents lower
Soybeans: 1 to 3 cents higher
Wheat: 5 to 10 cents lower

Soybean futures finished with a firmer tone after two-sided trade overnight. Support continues to come from the demand side of the market. Though there isn’t any fresh news on that front this morning, demand for U.S. soybeans has ramped up recently. We expect a firmer tone this morning, though selling in the wheat and corn markets could dry up buyer interest in soybeans.

Wheat futures will be pressured by forecasts for improved weather in the Southern Plains. Cold temps again nipped the already-stressed HRW crop over the weekend, but most crop watchers expect damage to be minimal. Forecasts call for a rain event later this week, which is expected to bring needed rainfall to dry southern and western areas of the Southern Plains.

Corn futures followed the wheat market lower overnight. Traders are not yet concerned with persistent wintry weather and corn planting delays.


Livestock calls                                                                      

Cattle: Higher
Hogs:  Mixed

Live cattle futures are expected to find support from strength in the cash cattle market late Friday, as prices rose to $120 to $122 in northern locations. Futures are trading at a discount to last week’s cash action. Inclement weather in the Central Plains is also price-supportive as it is stressing cattle.

Lean hog futures are signaling seasonal lows are in place, which could fuel additional buying. But May and summer-month hogs hold big premiums to the cash index, which is likely to lead to two-sided trade this morning. The cash hog market is expected to keep strengthening this week after firming each day last week. The CME lean hog index is starting to reflect the cash strength.   


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