Ahead of the Open | April 22, 2024
GRAIN CALLS
Corn: Steady to 2 cent higher.
Soybeans: 2 to 4 cents lower.
Wheat: Winter wheat 9 to 11 cents higher; HRS 3 to 6 cents higher.
GENERAL COMMENTS: Corn and soybeans favored the downside overnight, though buying activity increased into the break. Wheat favored the upside and went into the break near session highs. Outside markets were mixed overnight, as equity markets favored the upside though front-month crude oil futures continued to face selling pressure. The U.S. dollar index is currently trading around 120 points higher and near recent highs.
During the first quarter of 2024, China imported 7.14 MMT of soybeans from the U.S., down 50% from the previous year. Imports from Brazil surged 155% to 9.99 MMT. Market share for soybean shipments to China stood at 54% for Brazil versus 38% for the United States. During March, China’s corn imports from Brazil jumped 72% to 1.18 MMT, while arrivals from the U.S. fell 78% to 109,685 MT.
Russia’s IKAR agricultural consultancy raised its Russian 2023-24 grain export forecast by 2 MMT to 72 MMT, including 53 MMT of wheat. The wheat export estimate was up 1 MMT from its prior outlook.
Russian President Vladimir Putin ordered his government to present proposals to facilitate grain trading with other countries including India, China, Brazil and South Africa among others, which together with Russia make up the group of countries known as the BRICS, by July 1. The proposal would allow buyers to purchase directly from producers. Putin also ordered the government to set out additional support measures for farmers, including funding as well as ensuring supplies of gasoline and diesel.
House farm-state Democrats are clearly showing opposition to the new farm bill package being put together by House Ag Chair Glenn “GT” Thompson (R-Pa.) and staff. House Ag Ranking Member David Scott (D-Ga.) has penned an Op-Ed item on Agri-Pulse that takes Thompson and Republicans to task for proposing changes to food and nutrition programs, decrying the effort as not bipartisan relative to reaching agreement on the farm bill. House Dems keep saying the House GOP plan impacts the Thrifty Food Plan, and that’s a no-no. Thompson is looking at a committee markup sometime between May 14-17 or the following week between May 21-24. But the only consistent thing about this process has been delays and postponements.
World Weather Inc. forecast a wet bias for the Plains, Midwest and Delta beginning later this week and lasting into the early days of May, slowing fieldwork and a few weathers will be excessively wet, especially in the Delta. Meanwhile, cotton, corn and sorghum acres in west Texas are unlikely to receive much rain of significance in the coming ten days.
CORN: May corn futures saw modest selling pressure much of the overnight session, though buying increased into the break. Resistance stands at the 40-day moving average, currently at $4.36, which has capped most of the upside the last month and a half. Further buying eyes resistance at $4.42. Bulls are seeking to hold support at $4.32 then$4.28 3/4 on renewed selling strength, with significant backing from $4.26 3/4.
SOYBEANS: May soybean futures posted modest losses overnight. Bulls failed to overcome initial resistance at $11.55 3/4 overnight, which is backed by the 20-day moving average at $11.65 1/4. Further selling finds support at $11.45 then $11.34 1/4.
WHEAT: May SRW futures saw continued strength overnight. Prices failed to overcome Friday’s high of $5.58 3/4 overnight, which stands as initial resistance. Further strength finds resistance at $5.67 1/4. Initial support stands at $5.51 3/4 with backing from $5.42 1/2, then $5.36 3/4.
CATTLE: Choppy/lower.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, as technical resistance looms above the market and last Friday’s Cattle on Feed Report is not expected to illicit much of a reaction. USDA estimated there were 11.821 million head of cattle in large feedlots (1,000-plus head) as of April 1, up 174,000 head (1.5%) from year-ago but 35,000 head less than the average pre-report estimate implied. This marked the seventh consecutive month with a year-over-year increase in feedlot inventories. March placements of cattle into feedlots fell 12.3%, while marketings dropped 13.7%. The update for last week’s cash cattle trade is likely to carry more weight in trading today which will indicate if the average cash price fell for the fourth consecutive week. Wholesale beef prices ended Friday mixed as Choice fell 13 cents to $295.67 and Select rose $1.56 to $290.83
HOGS: Lean hog futures are expected to open with a firmer tone in a continuation of last week’s strength, though weakness in the cash index could limit gains after the open. The CME lean hog index is down 11 cents to $91.35 as of April 18. Traders will be closely eyeing the cash market today to see if weakness persists, as the premium in nearby May futures has grown to $4.875 to the index, while June futures stand $13.475 above today’s cash quote. June futures continued the uptrend stemming back to the start of the year and overcame significant moving average resistance in Friday’s surge higher, though prices remain below the April 10 close at $105.55, which marks the next significant technical resistance level. Wholesale pork prices rose 13 cents to $100.09 Friday, though movement slipped to just 214.37 loads.
