Ahead of the Open | April 28, 2023
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 4 to 8 cents higher.
Wheat: SRW steady to 2 cents lower; HRW and HRS 2 to 5 cents higher.
GENERAL COMMENTS: Soybeans, HRW wheat and spring wheat posted corrective gains overnight, while corn and SRW wheat failed to sustain buyer interest. Aside from short-covering, the upside will be limited as fresh supportive news is lacking. The U.S. dollar index is more than 500 points higher, which will restrict buying in the grain and soy markets. Crude oil futures are modestly firmer.
EPA is expected to announce an emergency waiver today that would allow E15 sales nationwide during the summer driving season from June 1 to Sept. 15, according to Bloomberg News. Biden administration officials hope the action will lower prices at the pump.
Additional rains will fall across HRW wheat areas of the Plains today into Saturday morning. Scattered showers are possible across the region next week. While this week’s rains have been the best since last summer, they won’t relieve drought in the driest southwestern areas of the Plains.
Temperatures are expected to trend cooler than normal across the Midwest over the next week. Some rainfall is expected in northern areas of the region, while central, southern and eastern areas of the Corn Belt will be mostly dry.
Today is first notice day – the start of the delivery process for May futures. There were no deliveries registered against May futures for corn, soybeans, soymeal and SRW wheat. There were 199 contracts registered for delivery against May soyoil futures.
CORN: July corn futures extended their price plunge to the lowest level since last July. The contract is heavily oversold and due for a corrective bounce, but any attempts at corrective buying have been fleeting. Near-term support is the July 2022 low at $5.74 1/4. Below that, support is in the $5.71 to $5.48 3/4 range.
SOYBEANS: July soybean futures posted modest corrective gains overnight. But other attempts at corrective rebounds earlier this week have resulted in a fresh wave of selling during daytime trade. Thursday’s low at $14.01 3/4 is near-term support, with additional support at the psychological $14.00 mark and the March low at $13.83 3/4. Near-term resistance is the 5-day moving average at $14.16 1/2.
WHEAT: July HRW wheat futures pivoted around the March low at $7.63 3/4 overnight after closing below it on Thursday. A rebound from this level would face resistance at $7.80 3/4. Failure to hold this support would open downside risk to the $7.55 to $7.45 area.
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open firmer on followthrough selling after a high-range close on Thursday. But two-sided trade is possible as traders remain cautious toward aggressively buying futures despite bullish cash fundamentals. Cash cattle trade picked up Thursday afternoon at higher prices. But with a fresh supply of contracted animals available with the flip of the calendar next week, packers appeared content to do just some fill-in buying without aggressively raising cash prices. Meanwhile, wholesale beef prices continue to strengthen, with Choice up $1.83 and Select $1.15 higher on Thursday, keeping packer margins solidly in the black.
HOGS: Lean hog futures are expected to open with a mixed tone. While price action has perked up the past two days amid corrective buying, premiums futures hold to the cash index may restrict buyer interest ahead of the weekend. The CME lean hog index is down 2 cents to $71.29 (as of April 26), ending a modest two-day uptick in prices. The May contract finished Thursday $6.835 above today’s cash quote while the June contract held a $18.81 premium. The pork cutout value firmed 44 cents yesterday, but packers have struggled to find sustained retailer demand in the upper $70.00 range. Movement totaled only 274.3 loads on Thursday.
