Market Snapshot | January 31, 2024

Corn futures are mostly a penny to 2 cents lower.

• Corn futures are favoring the downside with pressure stemming from the soy complex and crude oil weakness.
• Argentina and western and far southern parts of Brazil will continue to dry down through the weekend and into early next week, states World Weather Inc. Crop moisture stress will be on the rise in many areas, especially in Buenos Aires and La Pampa in Argentina where it has been driest recently. Yield potential may be threatened if significant rains don’t occur soon.
• Weekly ethanol production averaged 991,000 barrels per day (bpd) during the week ended Jan. 26, up 173,000 bpd (21.1%) from the previous week but 37,000 bpd (3.6%) below the same week last year. Ethanol stocks plunged 1.545 million barrels to 24.270 million barrels. That was the second largest weekly drawdown in ethanol stocks in the U.S. Energy Information Administration’s 14 years of data.
• March corn is pivoting mostly around the 10-day moving average of $4.46 1/2, with the previous session’s high of $4.48 1/4 serving as resistance. Initial support lies at $4.40.

Soybean futures are mostly 7 to 9 cents lower, while March meal is around $3.50 lower. March soyoil is trading near unchanged.

• Soybeans are facing moderate selling following Tuesday’s strong corrective gains, with meal futures leading the complex lower.
• While areas of western and southern Brazil are expected to dry out over the next week, with rising levels of stress for a few crop areas, the overall trend will be favorable for maturing early season crops and harvest, notes World Weather.
• Malaysian palm oil futures fell for a third consecutive session amid weaker rival oils and lackluster Chinese economic data, though the contract still logged a monthly gain.
•  March soybeans are trading below the 10-day moving average of $12.18 3/4, while initial support remains at $11.97 1/4. Additional resistance/support stands at the 20-day moving average of $12.30 1/2 and Tuesday’s low of $11.87 3/4.

Winter wheat futures are mostly 9 to 11 cents lower, whiles spring wheat is 5 to 7 cents lower at midmorning.

• Wheat futures are pulling back from Tuesday’s gains despite U.S. dollar weakness.
• The USDA attaché in Ukraine reported, “By the end of 2023, Ukraine independently resumed operations of its major marine ports on the Black Sea, Chornomorsk, Odesa and Pivdennyi. It increased the throughput of the Danube River export routes.” The attaché stated, “if Ukraine maintains average monthly exports of around 4 MMT for all grains combined for the remainder of the marketing year, they will export the vast majority of the harvest.”
• The European Commission proposed measures to limit agricultural imports from Ukraine and offer greater flexibility on rules for fallow land in a bid to quell protests in France and other EU members.
• March SRW futures have extended below the 20- and 10-day moving averages of $6.00 and $5.98 3/4, with next support at $5.91. Tuesday’s high of $6.06 3/4 stands as solid resistance.

Live cattle are slightly lower, while feeders are posting heavier losses.

• Nearby live cattle futures have taken back Tuesday’s gains, as fading wholesale values weigh on prices along with positioning ahead of this afternoon’s Cattle Inventory Report.
• USDA’s Cattle Inventory Report is set for release at 2 p.m. CT. Analysts polled by Urner Barry expect USDA to show the U.S. cattle herd 1.8% below year-ago as of Jan. 1 at roughly 87.7 million head. If realized it would be the smallest herd dating back to 1951. The annual calf crop is expected to have fallen 2.4% to just under 33.0 million head. Beef replacement heifers will be a key category, as pre-report estimates range from a 2.7% decline to a 4.1% increase from year-ago.
• Wholesale beef values continued lower Tuesday, with Choice falling $3.35 to $296.07, while Select dropped $1.77 to $287.05, narrowing the Choice/Select spread to $9.02. Movement improved to 134 loads.
• February live cattle are trading within Tuesday’s range, with support at $177.30, while Tuesday’s high of $178.15 stands as initial resistance.

Lean hogs are narrowly mixed at midsession.

• February hog futures are trying to extend gains for the eighth straight session, though notable overhead resistance is limiting buying.
• The CME lean hog index firmed another 88 cents to $71.48 as of Jan. 29, marking the biggest daily gain during this month’s seasonal rally.
• The pork cutout value fell 52 cents to $88.55, led lower by more than a $9 drop in primal bellies, while all other cuts posted gains. Movement increased to 389.6 loads.
• February lean hogs are trading within Tuesday’s upper range and continue to face resistance at the 200-day moving average of $76.31, while initial support remains at $75.03.