Ahead of the Open | March 13, 2024
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GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 7 to 9 cents lower.
Wheat: SRW 1 to 3 cents lower; HRW 5 to 7 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each pulled back from Tuesday’s gains overnight, continuing the norm of overnight weakness. Each is near pivotal resistance. Outside markets were supportive overnight, as front-month crude oil futures surged and are nearing the $80.00 mark, while the U.S. dollar index posted modest losses, current trading around 60 points lower.
Ukrainian maritime agricultural exports are expected to decline by 20% in March compared to February levels, according to a Reuters report citing information from Spike Brokers. Although specific tonnage figures were not provided, the firm stated the pace of maritime exports is slowing down compared to February. Railway transit of agricultural products out of Ukraine has also decreased, with an average daily rate of 299 wagons this month compared to 374 in February, marking the lowest figure since the beginning of the war. Additionally, exports via roads have declined to 132,000 MT from March 1-11, compared to 172,000 MT for the same period in February.
France’s ag ministry cut the country’s wheat export outlook for 2023-24. It now forecasts wheat exports outside the EU at 10.15 MMT, down 100,000 MT from last month. Exports within the bloc are forecast at 6.19 MMT, down 130,000 MT from last month. As a result, French wheat stocks at the end of the 2023-24 marketing year are now projected at 3.74 MMT, nearly 47% above 2022-23 and a 19-year high.
China should rely more on structural reforms and less on economic stimulus to drive economic growth this year, Liu Shijin, a policy adviser to the People’s Bank of China (PBOC) said. Liu said the economy can achieve its growth target of around 5% this year but that more effort is needed on both stimulus and structural reforms. “There is no issue with macroeconomic policies becoming moderately loose and more proactive, but there is a tendency to focus solely on macroeconomic policies and not even remember how to promote some structural reforms,” Liu said. “The relationship between macro policies and structural reforms may need to be straightened out.” Liu has been calling for reforms to widen migrant workers’ access to public services enjoyed by city dwellers, as well as policies that bolster private entrepreneurship.
CORN: May corn futures saw selling pressure off 40-day moving average resistance overnight, which stands as bulls initial target at $4.42 1/4. Further resistance stands at $4.47 1/2, then $4.50 1/2. Meanwhile, bulls are seeking to hold support at $4.35 1/2, the 20-day moving average, with significant backing from $4.30.
SOYBEANS: May soybean futures gave up a portion of Tuesday’s gains overnight. Prices closed right on the 40-day moving average Tuesday, which stands as formidable resistance at $11.94 3/4. That is backed by the psychological $12.00 mark, then $12.08 1/4. Support comes in at $12.84, which capped losses overnight, $11.79 1/4, then the 20-day moving average at $11.73.
WHEAT: May SRW futures posted modest losses on light volume overnight. Resistance stands at $5.50, the 10-day moving average, then $5.55, which capped gains Tuesday and overnight. Further buying eyes the 20-day moving average at $5.61 1/4. Bulls are seeking to hold support at $5.44 3/4, $5.41 1/4, with little backing until $5.28 1/2.
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, supported by uptrend line resistance stemming from the December low, though prices continue to struggle breaking above recent highs, which could limit gains after the open. While cash cattle trade has yet to take place this week, rising cutout values could provide futures the boost they need to push above recent highs that have capped gains for three consecutive weeks. Choice cutout rose $1.71 to $310.59 while Select firmed 72 cents to $299.60 on Tuesday. That is doubly impressive considering dressed weights continue to rise contra seasonally following the big drop off in January due to the artic weather. Firming cutout continues to improve packer margins, which remains supportive for the cash cattle outlook for this week.
HOGS: Lean hog futures are expected to open higher on continuation of Tuesday’s strength. April lean hog futures posted an impressive reversal on Tuesday, helped by a rebound in the CME lean hog index to a for-the-move high. After falling yesterday, the index rose 20 cents to $81.61 today (as of Mar. 11). After yesterday’s gains, the premium April futures hold to the index extended to $3.74. Futures are likely to closely track price action in the index over the coming weeks as traders remain concerned over the near-term pork outlook, though slaughter running below both week-ago and year-ago indicates marketings are current, which should continue to boost cash prices. Wholesale pork prices slipped from their midsession quote, falling $1.04 to $92.47, led by weakness in bellies. Movement remained firm at 302.2 loads, indicating robust retailer demand as grocers stock up for features to kick off the grilling season in a few weeks.
