Ahead of the Open | April 19, 2024
GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 3 to 5 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW 1 to 3 cents higher; HRS 5 to 8 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat posted corrective gains during the overnight session. Some outside markets had an initial knee-jerk reaction to news Israel carried out a retaliatory strike against Iran, but market jitters eased after Iran said it had no plans to respond. Front-month crude oil futures are around 50 cents lower and the U.S. dollar index is down about 200 points this morning.
USDA reported daily corn sales of 216,500 MT to Mexico, with 23,000 MT for 2023-24 and 193,500 MT for 2024-25. USDA reported daily soybean sales of 121,500 MT to unknown destinations, with 13,500 MT for 2023-24 and 108,000 MT for 2024-25.
EPA today will announce plans to temporarily expand E15 sales beyond June 1 for the 2024 summer driving season, Reuters reported. EPA has taken similar actions the past two years, granting a 20-day emergency waiver and then repeatedly extending it through Sept. 15.
China is set for another year of bumper harvest of grains and oilseeds, helped by expanded planting of winter wheat and rapeseed and healthy growth of seedlings, the country’s agriculture ministry said. Good prices and government subsidies encouraged farmers to expand winter wheat and rapeseed plantings, an ag ministry official said. “I went to the main producing areas of Hebei, Shandong, Henan and Anhui, indeed the wheat fields are healthy, robust... good seedlings lay the foundation for a good harvest,” he said.
SovEcon cut its 2024 Russian wheat crop forecast by 1 MMT to 93 MMT.
India’s wheat stocks totaled 7.5 MMT at the beginning of April, down from 8.35 MMT last year and a 16-year low. Over the past decade, wheat stocks on April 1 averaged 16.7 MMT.
World Weather Inc. says rains will fall on some areas of the Southern Plains late next week into early May. But rainfall will be lighter than normal from western Kansas down through the northern Texas Panhandle. Rains across the Corn Belt and Delta may become excessive in some areas.
CORN: May corn futures continue to hold in the sideways pattern that has hemmed prices for nearly two months. Near-term support extends from $4.26 1/4 to this month’s low at $4.24 1/2. The 10-, 20-, 40- and 50-day averages all lie within a range from $4.31 1/2 to $4.33, proving overhead resistance.
SOYBEANS: May soybean futures are nearing a test of the February low of $11.28 1/2, which is key near-term support. Below that, bears would target $11.00. Initial resistance is at the 5-day moving average at $11.44 3/4 and then at $11.50.
WHEAT: May SRW futures failed to find sustained buying on an overnight spike of the 10-day moving average around $5.51. That level will serve as initial resistance, followed by a band from $5.52 1/2 to $5.58 1/2, where the 20-, 40- and 50-day moving averages stand. Initial support is at this week’s low of $5.34 1/4.
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though choppy trade is likely as trades await cash cattle trade and position for this afternoon’s Cattle on Feed Report. The report is expected to show the April 1 feedlot inventory up 2.1% from year-ago at 11.856 million head, while placements and marketings are anticipated to be down 7.0% and 11.9%, respectively. Wholesale beef prices continued to slide, with Choice down $1.01 to $295.80 and Select $1.61 lower to $289.27. Falling wholesale beef prices have kept packer margins deep in the red and made them unwilling to raise cash cattle bids.
HOGS: Lean hog futures are likely to start with a mixed tone this morning. After sharp corrective losses last week, futures have paused this week. Fundamental support will come from the seasonally rising CME lean hog index, which is up another dime to $91.46 as of April 17. After recent declines, the premium in May lean hog futures tightened to $3.265 as of Thursday’s close. The pork cutout value firmed 41 cents on Thursday to $99.96 and movement improved to 303.7 loads.
