Ahead of the Open | April 10, 2023
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: SRW steady to 1 cent higher; HRW 5 to 8 cents higher; HRS 3 to 5 cents higher.
GENERAL COMMENTS: Wheat futures firmed overnight, led by HRW contracts amid weather concerns in the Plains. Soybeans also ended higher overnight after two-sided trade, while corn favored the downside. Outside markets are negative, with front-month crude oil futures around 75 cents lower and the U.S. dollar more than 500 points higher.
Above-normal temps are expected this week, along with mostly dry conditions across the central United States. That will improve field conditions for spring planting in the central and southern Corn Belt but will continue to stress dry HRW areas of the Southern Plains. Aggressive snowmelt is expected across the Northern Plains and upper Midwest, which will lead to flooding. Warmer, drier weather will be welcome in the Delta and Southeast after heavy weekend rainfall.
Brazil’s soybean harvest reached 82% as of last Thursday, nearly catching up to the 84% completed level from last year at that time. Safrinha corn planting is completed. Center-south Brazil will get time rains over the next two weeks. With a good portion of the safrinha corn crop planted after the ideal window, rainfall from now until harvest will be closely monitored.
Russia on Friday threatened to bypass the UN-brokered grain deal unless obstacles to its agricultural exports were removed, while talks in Turkey agreed removing barriers was a necessary condition to extending the agreement beyond next month. Russian Foreign Minister Sergei Lavrov said Russia could work outside it if Western countries maintain what he said were obstacles to agricultural exports that were getting tougher. Lavrov said that if the West did not want to be honest about what UN Secretary-General Antonio Guterres had sought to do with the deal, then Ukraine would have to use land and river routes to export its grain.
Russia is considering raising its base price for calculating the wheat export tax to 17,000 rubles ($212.23) per metric ton from 15,000 rubles, Vedomosti daily newspaper reported, citing two unnamed sources in exporting companies. The move would reduce the rate for export shipments.
Imports of Ukrainian grain to Poland will be temporarily halted to mitigate impact on prices, though grain transit through the country will still be allowed, Polish Agriculture Minister Robert Telus said on Friday.
CORN: May corn futures bounced off the 20-day moving average at $6.41 3/4 overnight. That level will serve as initial support, followed by the December low at $6.36 3/4. Near-term resistance is layered from $6.45 1/4 to $6.51 1/2.
SOYBEANS: May soybean futures posted corrective gains overnight but failed to clear the psychological $15.00 mark. That will serve as initial resistance, with additional resistance in the $15.02 to $15.03 range. Near-term support is last week’s low at $14.83 1/4 and the 20-day moving average near $14.80.
WHEAT: HRW wheat futures extended their record premium to SRW futures during overnight trade. Near-term resistance for May HRW wheat futures extends from $8.82 1/2 to $9.02. Near-term support extends from $8.69 to $8.53 1/4.
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open higher on bullish cash fundamentals and technicals. But there is risk of profit-taking as traders gear up for what is likely to be an extended standoff in the cash market. Any pullback in futures would be purely corrective in nature and should be limited as signs point toward firmer cash prices again this week and traders have been relatively cautious with April live cattle given the surge in cash prices the past two weeks. Choice wholesale beef prices continued their recent climb on Friday with a gain of $1.33, though Select dropped 85 cents.
HOGS: Lean hog futures are expected to open with a mostly weaker tone amid weakening cash fundamentals and technicals. The CME lean hog index is down another 46 cents, extending the prolonged decline. At $72.88 (as of March 6), the cash index is down $7.13 from the March peak and just 77 cents above the January low. The pork cutout value dropped 78 cents on Friday. Buyer interest in lean hog futures is likely to be limited until the cash and product markets post secondary lows and start their climb to a seasonal high during summer.
