Ahead of the Open | April 17, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 4 to 8 cents higher.
Wheat: SRW 2 to 4 cents higher; HRW 3 to 6 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Soybeans finished higher overnight, while corn ended mostly firmer and the wheat market had a mixed tone. Soy futures should find support from news Argentine grain inspectors launched a 24-hour strike at midnight that will impact the major port hub at Rosario. Key will be whether the strike ends at midnight tonight as planned or is extended. SRW wheat futures favored the upside overnight, while HRW and HRS futures traded lower. Outside markets are negative this morning with front-month crude oil futures under pressure and the U.S. dollar index nearly 300 points higher.
Ukraine’s restoration ministry said the Black Sea grain initiative was in danger of being shut down after Russia again blocked inspections of ships under the deal. Russia said an extension of the deal “are still not that rosy,” as it reiterated the need to improve conditions for exports of its grains and fertilizers.
Slovakia will temporarily halt imports of grains and other selected products from Ukraine, a government spokesman said on Monday, joining Poland and Hungary in such action. The European Commission said unilateral action on trade by EU member states is unacceptable. EU member countries’ envoys in Brussels will discuss this week bans on Ukrainian grain imports, a senior EU official said.
Traders expect members of the National Oilseed Processors Association (NOPA) to report March soybean crush totaled 183.4 million bu., which would be up 10.9% from February and 0.5% above last year’s March record. If realized, it would also be the largest crush total since October.
World Weather Inc. says frost and freezes will impact many areas in the Central Plains, Midwest and possibly the northern Delta this coming weekend and early next week. Dry areas of the west-central and southwestern Plains will get some much-needed precip after the cold front passes.
Flooding in the Red River Valley may not be as bad as feared as precipitation will be limited during the next few weeks.
CORN: May corn futures chopped around unchanged in light overnight trade. Near-term resistance is at last Friday’s high of $6.68, followed by this month’s high at $6.68 1/2. A push above these levels would have bulls targeting the $6.75 to $6.86 level. Near-term support is in the $6.58 1/2 to $6.56 3/4 range.
SOYBEANS: May soybean futures continue to pivot around the $15.00 level, finding buyer interest under that level overnight. Near-term resistance extends from $15.10 1/4 to this month’s high at $15.27 3/4. Near-term support extends from $15.00 to $14.82 1/2.
WHEAT: May HRW wheat futures gapped higher overnight but couldn’t sustain the gains and turned lower. Near-term resistance extends from the overnight high at $8.84 to this month’s high at $9.02. Near-term support extends from $8.67 3/4 to $8.39 1/2.
CATTLE: Mixed.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mixed tone to start the week. While cash fundamentals remain fully bullish, we wouldn’t be surprised to see some additional corrective selling after two days of that to close out last week. Traders are expecting cash cattle to trade higher again this week after strong gains and a new all-time high last week, which should limit the downside. But we fully expect the cash market will continue to trade above futures as traders remain relatively cautious buyers. Choice boxed beef prices firmed another $2.20 on Friday, while Select gained 49 cents. Strong wholesale prices have kept packer margins in the black despite the surge to all-time highs in cash cattle prices.
HOGS: Lean hog futures are expected to open with a mostly lower tone. While traders may try to extend last Friday’s corrective gains, the upside is likely to be limited as cash hog prices continue to fall. The CME lean hog index is down another 32 cents to $71.63 (as of April 13), extending the prolonged price slide. April lean hog futures, which exit the board today and will be settled against the cash index on Wednesday, finished at a 12-cent premium to today’s cash quote. May hog futures finished last Friday at an $8.82 premium to today’s cash quote. The pork cutout value firmed 69 cents on Friday, but pork is cheap compared to beef with the Choice beef/pork cutout ratio at 3.9.
