Market Snapshot | February 28, 2024

Market Snapshot
Market Snapshot
(Pro Farmer)

Cotton producers: Increase old- and new-crop sales... Cotton futures surged to the highest level since mid-September 2022 on the continuation chart during overnight trade. While futures have gone parabolic and there could be more near-term upside potential, prices have only reached these levels three other times previously. We advise cotton hedgers and cash-only marketers to sell another 10% of 2023-crop to get to 90% sold. The remaining 10% of unsold old-crop inventory will be gambling stocks in case prices continue to surge. We also advise selling another 15% of expected 2024-crop production to get to 25% forward sold for harvest delivery.

 

Corn futures are 2 to 3 cents higher.

  • Corn futures are favoring the upside for the third straight session, marking the longest stretch of gains since mid-January, though technical resistance continues to dampen buyer interest.
  • Brazil is still expecting greater rainfall in the second week of the two-week outlook, notes World Weather Inc, which will support the safrinha crop through the next few weeks. However, concern will remain over post rainy season soil moisture and late-planted safrinha crop development potential due to anticipated warmer biased temps.
  • Weekly ethanol production fell 6,000 barrels per day (bpd) to 1.078 million bpd during the week ended Feb. 23, up 75,000 bpd (7.5%) from the same week last year. Ethanol stocks rose 520,000 barrels to 26.022 million barrels, the highest since the week ended March 17, 2023.
  • South African farmers are expected to harvest 12.6% less corn in the 2023-24 season compared to the previous one, according to the government’s Crop Estimates Committee.
  • May corn edged above the 10-day moving average, currently trading at $4.25 1/4, for the first time since Feb. 2. Next resistance is at the 20-day moving average of $4.37 1/4. Initial support lies at $4.20 3/4.

 

Soybean futures are mostly 2 to 3 cents higher, while May soymeal is around $4.00 higher. May soyoil is 50 points lower.

  • Soybeans are firmer, with corrective strength in meal futures providing support, while moderate losses in soyoil curbs buyer interest.  
  • Abiove cut its estimate for Brazil’s 2024 soybean crop for the second time this month to 153.8 MMT, down from the previous forecast of 156.1 MMT.
  • Malaysian palm oil fell overnight, snapping three sessions of gains as softer Chicago soyoil prices and weak data pressured prices.
  • May soybeans continue to find support at Monday’s low of $11.33 1/2, while initial resistance stands at $11.55 1/4.

 

Winter wheat futures are mostly 7 to 11 cents lower, while HRS is 4 to 8 cents lower.

  • Winter wheat futures have erased Tuesday’s gains amid easing global supply concerns combined with U.S. dollar strength.
  • Ukraine grain exports through Feb. 27 exceeded last year’s level by almost 12%, reaching 5.3 MMT, according to ag ministry data.
  • Wild temperatures swings, bouts of snow and strong winds will stress some crops in the Northern and Central U.S. Plains during the next five days, according to World Weather. Some of the coldest conditions occurred today and snow cover was not widespread, raising potential for some crop damage, though most crops will not experience any big changes.
  • May SRW futures continue to consolidate sideways, with the 10-day moving average around $5.74 3/4 providing initial support, backed by Tuesday’s low of $5.71 1/2. The 20-day moving average of $5.90 1/2 serves as initial resistance.

 

Live cattle and feeders are sharply lower, with feeders are facing heavier selling.

  • Nearby live cattle are deepening Tuesday’s losses following a series of futile efforts to extend a move beyond last week’s high.
  • Estimated cattle slaughter was only 247,000 head through the first two days this week, 2,930 head behind last year. With plants running 32-hour shifts and little to no Saturday kills, this week’s tally could fall as low as 580,000 head. Packers continue to reduce slaughter runs to manage tight market-ready supplies amid negative margins.
  • Choice boxed beef slid 5 cents Tuesday to $301.74, while Select rose $2.41 to $290.40, narrowing the Choice/Select spread to $11.34. Movement totaled 100 loads.
  • April live cattle fell below the 10-day moving average of $186.92, with support now at the 20-day moving average of $185.71. Tuesday’s close of $187.725 is initial resistance.

 

Lean hogs are marking moderate to strong gains at midsession.

  • Hog futures have recouped early-week losses as solid technical support and rising cash fundamentals continue to underpin prices.
  • The CME lean hog index is up another 32 cents to $79.78, extending its seasonal climb.
  • The pork cutout value rose 88 cents Tuesday to $91.87. Movement rose to 319.5 loads.
  • April lean hogs tested resistance at $87.13. Support is at the 10-day moving average around $86.00.

 

 

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