Ahead of the Open | April 16, 2024
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: SRW 4 to 6 cents lower; HRW steady to 2 cents lower; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat saw choppy trade overnight trading on both sides of unchanged, though each were lower into the break. Outside markets were quiet overnight, given concerns of escalating conflict in the Middle East. Front-month crude oil futures continue to face steady selling pressure from the highs seen earlier this month, while the U.S. dollar index is trading near unchanged on 5-month highs.
USDA rated 55% of the winter wheat crop as “good” to “excellent,” down one percentage point from the previous 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 dropped 8.3 points to 337.0, led by a nearly six-point drop in top producer Kansas. The SRW crop improved 8.3 points to 382.1, led by a nearly four-point increase in top producer Illinois. Click here for details.
South American crop consultant Dr. Michael Cordonnier cut his Argentine corn production forecast by 3 MMT to 50 MMT, noting impacts from corn stunt disease. He left his Argentine soybean crop peg at 51 MMT. Cordonnier raised his Brazilian soybean crop estimate 2 MMT to 147 MMT, due to the crop in Rio Grande do Sul finishing much better than anticipated. He kept his Brazilian corn crop forecast at 112 MMT.
Ukraine’s grain production is expected to fall to about 52 MMT this year, down 6 MMT (10.3%) from year-ago, due mostly to reduced plantings, according to the first official forecast from the ag ministry. The ministry expects the country to produce 27 MMT of corn, 19 MMT of wheat and 5 MMT of barley. Oilseed production is forecast at 12.5 MMT for sunseeds, 5.2 MMT for soybeans and 4 MMT for rapeseed. USDA’s ag attaché in Ukraine expects production of 26.6 MMT for corn, 21.1 MMT for wheat, 6.6 MMT for barley and 260,000 MT for rye.
CORN: May corn futures posted losses this morning. Initial resistance stands at $4.32 1/2, firmly backed by the 40-day moving average at $4.36 3/4. Bulls are seeking to hold support at $4.28 3/4 then $4.26 1/2 on continued selling pressure.
SOYBEANS: May soybean futures continue to struggle garnering much bullish momentum. Bulls are seeking to overcome resistance at $11.58 1/4, which is backed by $11.65 3/4 then the 10-day moving average at $11.69 1/2. Support comes in at $11.51, quickly reinforced by the psychological $11.50 mark, then $11.41.
WHEAT: May SRW futures traded on both sides of unchanged overnight, though favored the downside this morning. Resistance stands at the psychological $5.50 mark with backing from the 10-day moving average at $5.54 1/4 then $5.60 1/2. Bulls are seeking to hold support at $5.44 1/4 then $5.40 1/4 on continued weakness.
CATTLE: Choppy/lower.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone on renewed technical selling. Prices rebounded Monday though closed well off session highs and failed to overcome initial technical resistance. Cash cattle prices averaged $183.84 last week, down $1.89 from the previous week. After posting an all-time high the week ended March 22, cash cattle prices have fallen for three straight weeks, with a $5.72 decline during that period, though futures have sustained greater weakness during that period indicating traders retain their bearish bias. Wholesale beef prices ended Monday mixed, as Choice cutout stayed above the $300.00, firming 31 cents to $300.88. Select beef fell $4.20 to $291.34.
HOGS: Lean hog futures are expected to open mixed following indecisive trade on Monday. Bulls managed to defend lower trade yesterday though the upside was limited. June lean hog futures spiked the 40-day moving average at $101.80 but closed above it. That level is key support today. Traders appear to be dismayed by the relatively weaker gains seen in the CME lean hog index, which is up another 17 cents to $90.73 as of April 12. May futures retain a modest premium to the index, well below what is historically normal for the index to rise from now until the May contract’s expiration in mid-May. Wholesale pork prices surged to a fresh for-the-move high Monday, rising $2.40 to $103.60. Gains were led by a $19.29 jump in bellies.
