Ahead of the Open | March 27, 2024
GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 5 to 7 cents lower.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Corn and soybeans each favored the downside overnight, with corn leading the way lower. Wheat showed relative strength and went into the break near unchanged. Outside markets were not favorable overnight, as front-month crude oil futures posted modest losses and the U.S. dollar index traded higher and near six-week highs. The stock market is trading within 1% of all-time highs.
The Japanese yen dropped to its lowest level against the U.S. dollar since 1990, below the area that triggered intervention by Japanese authorities in 2022. The dollar has jumped almost 20% against the yen since the beginning of last year. Japan’s finance minister issued his strongest warning to date and said authorities could take “decisive steps” — a phrase previously used in 2022 just before Japan stepped in to sell dollars on the open market.
China’s industrial profits rose 10.2% from year-ago to 914.06 billion yuan during the first two months of 2024. That followed a 2.3% decline in 2023, suggesting the economic turnaround in China is gaining traction. Profits for state-owned companies increased 0.5% while those in the private sector jumped 12.7%.
Argentina exported 82,548 MT of beef in February, the biggest monthly total since 1967. During the first two months of this year, Argentine beef shipments reached a record 160,478 MT, with more than three-quarters of the total going to China.
CORN: May corn futures continued lower overnight. Bulls are seeking to reclaim support at $4.30, which is backed by resistance at $4.35 1/2, the converged 10-day and 20-day moving averages. Further selling finds support at $4.25 then $4.22.
SOYBEANS: May soybean futures traded lower overnight and are threatening the recent four-week uptrend. Bulls are seeking to reclaim support at $11.96 1/2, the 40-day moving average, which is quickly backed by the psychological $12.00 mark. Further buying finds resistance at $12.12. Meanwhile, support stands at $11.89 1/2, which is backed by $11.85 1/2, then $11.81.
WHEAT: May SRW futures posted modest losses overnight. Bulls are looking to reclaim support at $5.46 1/2, the 10-day moving average, before targeting stiffer resistance at the psychological $5.50 mark, which is quickly backed by $5.51 1/4. Bulls are seeking to maintain a higher low on the daily bar chart, keeping prices above $5.37 support, which is backed by $5.28 1/2.
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open lower in a continuation of the heavy selling the first two days this week, though steep discounts to cash prices could limit losses after the open. Futures are breaking down technically, giving the near-term advantage to bears. Cash cattle trade has been minimal thus far this week, with trade taking place at $186.00 in the northern market on Monday. Continued weakness in futures points to potentially sharply lower cash trade, which would likely render a near-term top being in place in both the cash market and futures. That is not uncommon for late March. Wholesale beef prices ended Tuesday mixed, with Choice cutout rising 20 cents to $311.09 and Select dropping $1.70 to $300.26.
HOGS: Lean hog futures are expected to open with a mostly weaker tone, as prices continue to face stiff technical selling, though underlying cash fundamentals remain strong. Following a one-day decline, the CME lean hog index is up 21 cents to $83.69 (as of March 25), resuming the seasonal rise. Futures rebounded Tuesday on resurgent cash strength, though failed to maintain gains in deferred contracts as the session went on. April futures trading at a $1.885 premium imply traders see a modest seasonal rise over the next three weeks, though price action in futures is likely to be sensitive to the cash market. Wholesale pork prices slipped 41 cents to $95.33 on Tuesday, driven lower by a $10.36 drop in bellies, though the previous day’s price was the highest since last October.
