Ahead of the Open | April 12, 2024
GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Corn and soybeans posted modest corrective gains overnight while wheat spent most of the night trading near unchanged. Volatility continues to persist in the equity market, which could spill over into grains if it continues. Front-month crude oil futures surged near last week’s highs overnight and the U.S. dollar index is over 650 points higher.
China imported 5.54 MMT of soybeans last month, according to preliminary customs data, down nearly 20% from last year and the lowest for the month in four years. During the first quarter of 2024, China imported 20.83 MMT of soybeans, down 10.8% from the same period last year and also a four-year low.
U.S. Trade Representative Katherine Tai hinted that the review of Section 301 tariffs on China, imposed during the Trump administration, could conclude “soon.” Although no specific timeline was provided, Tai acknowledged the ongoing statutory four-year review of these tariffs and expressed hope for an imminent announcement of the outcome. Addressing the National Council of Textile Organizations, Tai emphasized the value of input from the textile industry, which has largely supported maintaining the tariffs. Speculation arose regarding the investigation’s results, especially concerning the textile industry’s concerns. Attention is now focused on Tai’s upcoming appearance before congressional trade panels next week, raising questions about whether this will serve as the platform for revealing the findings.
As of April 8, France’s ag ministry rated the country’s wheat crop as 64% good or excellent, down on point from the previous week and the lowest for this time of year since 2020. The spring barley crop was rated 60% good or excellent, down one point and the lowest on record going back a decade.
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 saw corrective gains overnight. Additional buying finds resistance at $4.33 3/4 then the 40-day moving average at $4.37 1/4. Support comes in at $4.29, the April 2 close at $4.26 1/2, then the psychological $4.25 mark.
SOYBEANS: May soybean futures saw corrective buying overnight. Bulls are seeking to overcome resistance at $11.68 1/2 then the 10-day moving average at $11.73 3/4. Support comes in at $11.59 1/4, yesterday’s low of $11.51, then $11.45 1/4.
WHEAT: May SRW futures traded in a tight range near unchanged overnight. Prices are near the lower end of the recent upward trend. Resistance stands at $5.55, which is backed by the 50-day moving average at $5.61 1/2. Support comes in at the psychological $5.50 mark then $5.45 1/4.
CATTLE: Lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open lower as weakening cash fundamentals continue to weigh heavily on the market. While cash cattle trade has been light so far this week, most of the sales have taken place around $2.00 lower than last week, which would be in line with the last two weekly declines. Given the sharp increase in weights and reduced slaughter runs, packer demand for cash cattle is limited. Next week’s Cattle on Feed Report is likely to push cash cattle trade late into the week again, leaving futures to dictate the trend, which could lead to more weakness. Wholesale beef prices ended Thursday mixed, as Choice cutout rose 14 cents to $298.37 and Select dropped 87 cents to $295.15. Still, the Choice/Select spread remains narrow at $3.22.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, as prices continue to be supported by cash fundamentals. Technical support was confirmed at the 10-day moving average following yesterday’s modest bounce. Bulls are seeking to build momentum and chalk up Wednesday’s weakness to corrective selling. The CME lean hog index continues to show impressive strength, rising another $1.06 to $89.84 as of April 10. Cutout values surged to a fresh high as well, rising $1.04 to $101.29, driven higher by big gains in bellies and ribs, though movement slipped to just 197.31 loads. April futures go off the board at noon today and will cash settle against the index quote for April 12 when it is released next Tuesday.
