Ahead of the Open | April 9, 2024
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: 8 to 10 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside overnight, though volume was light. Spreading is likely to continue to be active as funds roll their positions from the May contracts. Outside markets are likely to remain relatively quiet as the market awaits inflation data on Wednesday. Front-month crude oil futures continue to consolidate near recent highs, while the U.S. dollar index is trading around 200 points lower.
USDA rated 56% of the winter wheat crop as “good” to “excellent,” unchanged from the previous week, as expected. But there was a one-point increase in the top category. USDA rated 12% of the crop as “poor” to “very poor,” up one point from last week. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop slipped 0.1 point to 345.3 while the SRW crop improved 2.3 points to 373.8. CCI ratings are far above year-ago for HRW and slightly better for the SRW crop. Click here for details.
South American crop consultant Dr. Michael Cordonnier cut his Argentine corn crop estimate by 2 MMT to 53 MMT, noting heavy insect and disease pressure. Cordonnier kept his Argentine soybean crop forecast at 51 MMT. He also maintained his Brazilian crop estimates at 145 MMT for soybeans and 112 MMT for corn. Conab will update its official Brazilian crop estimates on Thursday morning.
Gold prices posted a record high for an eighth consecutive day overnight on support from speculative buying and geopolitical tensions. Traders are waiting for the Fed monetary policy meeting minutes and U.S. consumer inflation data on Wednesday for fresh signals on the path of interest rates, which appears it will be higher for longer. Elevated interest rates usually constrain the appeal of holding non-yielding gold, but traders have been ignoring this factor. Spot silver prices hit their highest level since June 2021 during overnight trade.
USDA reported daily export sales of 124,000 MT of soybeans for delivery to unknown destinations during the 2023-24 marketing year.
CORN: May corn futures favored the downside overnight. Bulls are seeking to overcome initial resistance at $4.35 1/2, which is backed by $4.37 1/2, then the 40-day moving average at $4.38 1/4, which has capped most of the upside over the past month. Support comes in at $4.32 1/4, which is quickly backed by $4.30, then $4.26 1/2.
SOYBEANS: May soybean futures posted losses overnight. Bulls are seeking to overcome initial resistance at $11.85, which is backed by the 40-day moving average at $11.95 3/4, which capped gains on Monday. Support comes in at $11.73, last week’s low of $11.68 1/2, then $11.55 on additional selling pressure.
WHEAT: May SRW futures continued lower overnight. Prices fell below the 40-day moving average overnight, which now marks initial resistance at $5.62 3/4. Further buying finds resistance at $5.67 1/4, then $5.72 1/4. Support at the 20-day moving average, currently at $5.55 1/2, limited losses overnight. Further selling finds support at $5.50.
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on continued corrective buying. Surging wholesale beef prices supported futures on Monday, as Choice cutout jumped $4.90 to $302.07 and Select leapt $5.57 to $300.27. Traders will be eyeing cutout values to determine if recent strength is sustained. Last week’s cash average fell $2.50 from the prior week to $185.73, the lowest mark in a month. Still, cash values remain well above nearby April futures, which could continue to limit selling pressure as the contract is going into delivery. The sharp selloff in futures has only partially been reciprocated in the cash market, which leaves room for additional corrective buying today, though continued concerns over Bovine Influenza A Virus (BIAV) cases in dairy cattle could limit the upside.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, though some profit-taking could limit gains after the open. June futures marked a fresh contract high and contract high close on Monday despite facing selling pressure during the session. Prices were fueled higher by continued robust strength in cash fundamentals. The CME lean hog index is up another 74 cents to $87.05 as of April 5. The index has lent significant strength to nearby April futures, which have surged $5.175 in the last two weeks. Wholesale pork prices posted impressive strength on Monday as well, as cutout firmed $2.58 to $100.33, the highest mark since last September. Gains were fueled by an $11.40 jump in primal bellies, though all cuts except picnics saw gains.
