Ahead of the Open | February 15, 2024
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: Winter wheat 9 to 12 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Selling persisted throughout the grain market overnight as corn, soybeans and wheat continue to trade on recent lows. Persistent impressive sales and falling projected acres did little to boost corn prices. Outside markets were favorable overnight as front-month crude oil futures saw modest gains and the U.S. dollar index traded over 330 points lower.
Based on the January WASDE, USDA projects the following:
Corn: Planted acreage of 91.0 million, with harvested acres of 83.1 million. A national average corn yield of 181.0 bu. per acre would produce a crop of 15.040 billion bushels. Total use is projected at 14.705 billion bu., with feed and residual use of 5.750 billion bu., food, seed & industrial use of 6.805 billion bu. (5.400 billion bu. for ethanol) and exports of 2.150 billion bushels. Carryover: 2.532 billion bushels (17.2% stocks:use). Price: $4.40.
Soybeans: Planted acreage of 87.5 million, with harvested acres at 86.6 million. A national average bean yield of 52.0 bu. per acre would result in a crop of 4.505 billion bushels. Total use is projected at 4.400 billion bu., including 2.400 billion bu. of crush and exports of 1.875 billion bushels. Carryover: 435 million bushels (9.9% stocks:use). Price: $11.20
Wheat: Planted acreage of 47.0 million, with harvested acres at 38.4 million. A national average yield of 49.5 bu. per acre would produce a crop of 1.900 billion bushels. Total domestic use is projected at 1.134 billion bu., with exports forecast at 775 million bushels. Carryover: 769 million bushels (40.3% stocks:use). Price: $6.00.
Export sales for the week ended Feb. 8:
Corn: Net sales of 1.307 MMT for 2023-24, up 7% from the previous week and 13% from the four-week average. Increases came primarily for Mexico and Colombia. Traders expected sales of 800,000 MT to 1.5 MMT.
Soybeans: Net sales of 353,800 MT for 2023-24, up 4% from the previous week but down 23% from the four-week average. Increases came primarily for China, with the bulk of that increase coming from a switch from unknown destinations, Spain and Japan. Sales were at the lower end of expectations of 300,000 to 800,000 MT.
Wheat: Net sales of 349,300 MT for 2023-24, down 8% from the previous week and 25% from the four-week average. Increases came primarily for the Philippines and Taiwan. Traders expected sales between 300,000 and 550,000 MT.
CORN: March corn futures traded in a tight range overnight. Bulls are seeking to overcome resistance at $4.25, $4.29, then $4.32 on corrective buying. Support stands at the contract low of $4.22 1/4, $4.20 then $4.15.
SOYBEANS: March soybean futures marked a fresh for-the-move low overnight. Resistance stands at $11.70 1/2 with backing from $11.79 1/4 then the 10-day moving average at $11.88. Bulls are seeking to hold support at $11.64 1/4, $11.59 3/4, then the psychological $11.50 mark.
WHEAT: March SRW futures continued Wednesday’s weakness overnight. Bulls are seeking to reclaim prior support now resistance at $5.81 1/2, with stiffer resistance at $5.91 3/4. Support stands at $5.77 1/2, $5.73 1/4, then $5.61.
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though some additional profit-taking is possible after the open. Reports of cash cattle trade at mostly $2.00 lower prices in the Southern Plains heavily pressured futures on Wednesday, though prices finished well off intraday lows. Recent weakness in cash cattle is likely to persist the rest of the week, marking an end to the four-week string of strong gains. Wholesale beef prices were mixed on Wednesday as Choice cutout rose $1.73 to $294.00 and Select dropped $1.28 to $284.02, while movement was light at 99 loads. Dressed weights have bounced slightly following the sharp drop due to the artic weather in January, which could further limit strength in the wholesale market, though it should limit the downside in cash cattle prices. USDA reported net beef sales of 16,600 MT for 2024, down 19% from the previous week and 18% below the four-week average.
HOGS: Lean hog futures are expected to open higher on continuation of Wednesday’s strength. After consolidating for four consecutive sessions, April futures surged on Wednesday, marking a technical breakout and nearly tested the late-January high closes. Stiff technical resistance at the late-January highs could limit gains and will be an important benchmark for bulls and bears alike. The CME lean hog index rose 48 cents to $74.60 today (as of Feb. 13), extending the seasonal price rebound. April hogs are now nearly a $10.00 premium to today’s cash quote, which is about the average seasonal gain in the cash index from now until mid-April. Wholesale pork prices weakened on Wednesday, falling $1.26 to $85.90, led lower by hams. USDA reported net pork sales of an impressive 71,900 MT for 2024, a marketing-year high and the most for a single week since October 2019.
