Ahead of the Open | March 1, 2024
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 6 to 8 cents higher.
Wheat: Winter wheat 4 to 6 cents lower; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Soybeans posted corrective gains overnight, wheat posted modest losses and corn was caught in the middle. Fridays have been notorious for grain market weakness for the past several months, so a break from that trend would be noteworthy. Front-month crude oil futures surged to fresh three-month highs overnight, while the U.S. dollar index traded near unchanged.
The Senate voted 77-13 Thursday night to approve a short-term stopgap spending bill to extend government funding until March 8 for 20% of agencies, including USDA, and March 22 for the rest. The House and Senate must pass six spending bills next week (including USDA funding) to avoid a partial shutdown on March 8 at midnight.
USDA is expected to report January soybean crush totaled 196.3 million bu., according to a Bloomberg survey. That would be down 3.9% from the all-time record in December but 2.7% above January 2023. Corn-for-ethanol production is expected to total 445.9 million bu., down 7.4% from December but up 1.1% from last year.
The average closing levels for December corn futures, November soybeans and September HRS futures during February set the spring crop insurance prices for those crops. The spring crop insurance price is $4.66 for corn (down $1.25 or 21.2% from last year), $11.55 for soybeans (down $2.21 or 16.1%) and $6.84 for spring wheat (down $2.03 or 22.9%).
CORN: May corn futures traded near unchanged most of the overnight session. Gains have stalled near $4.30, marking that as an important pivot today. Resistance stands at $4.32 then the 20-day moving average at $4.34 1/4. Support comes in at the 10-day moving average at $4.28, $4.25 then $4.23 3/4.
SOYBEANS: May soybean futures posted corrective gains overnight. Resistance stands at the 10-day moving average at $11.54 1/2, backed by Tuesday’s high of $11.61 1/2, then $11.66. Support stands at $11.44, $11.40 3/4, then the contract low at $11.28 1/2.
WHEAT: May SRW futures turned lower overnight following relative strength on Thursday. Bulls are looking to overcome resistance at $5.75, quickly backed by the 10-day moving average at $5.77 1/2, then $5.84 1/4. Meanwhile, support comes in at $5.69 then $5.59 on continued selling.
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open mostly firmer, supported by technical buying. April futures tested both the 20-day moving average and the uptrend line stemming from the December low, both of which supported prices after Thursday’s open. Despite weaker futures this week, cash cattle trade has taken place around steady prices from last week’s average, with some feedlots holding out for higher prices. Wholesale beef prices continue to show strength, improving packer margins, though they remain firmly in the red. Choice cutout rose $1.17 to $304.20 while Select firmed $1.24 to $294.18. That marks the highest Choice value since early November and the highest Select price since early July 2023.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on renewed technical strength. Following three consecutive days of losses, April lean hogs found support near the $86.00 mark, posting a rally yesterday that bulls will look to follow through on today. Aside from three strong gains last week, the seasonal climb in the CME lean hog index has been methodical. Today’s quote is up another 24 cents to $80.15 (as of Feb. 28). Modest cash gains could limit risk appetite in futures after the open, though April futures have narrowed the premium to the index to $6.475 as of Thursday’s close. Wholesale pork prices slipped 12 cents to $90.22 Thursday, as gains in loins and picnics failed to offset losses in all other cuts. Cutout remains above $90.00, which acted as a firm ceiling before overcoming that mark in mid-February.
