Ahead of the Open | April 6, 2023
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 8 to 12 cents lower.
Wheat: SRW steady to 1 cent lower; HRW 5 to 8 cents higher; HRS 3 to 6 cents higher.
GENERAL COMMENTS: Corn and soybeans faced followthrough selling overnight. Soybeans extended losses after disappointing weekly export sales data. Wheat futures mostly favored the upside, though SRW futures were negatively influenced by selling in soybeans and corn. Front-month crude oil futures are modestly firmer, while the U.S. dollar index is more than 150 points higher this morning.
World Weather Inc. says drying is expected in the Midwest as temperatures rise above normal, firming soils and improving spring planting prospects in the lower Midwest and Delta. Flooding will begin in north-central U.S. from eastern North Dakota and northeastern South Dakota to upper Michigan and parts of Wisconsin as snowmelt occurs more aggressively in response to warmer temperatures.
Western portions of HRW wheat areas will stay drier than usual through mid-month. Showers and thunderstorms will develop from central Texas to eastern Kansas.
Export sales for the week ended March 30:
Corn: Net sales of 1.247 MMT for 2022-23 jumped 20% from the previous week but were down 26% from the four-week average. China was the lead buyer at 586,100 MT. Sales were near the middle of expectations ranging from 800,000 MT to 1.5 MMT for 2022-23.
Soybeans: Net sales of 155,300 MT for 2022-23 fell 55% from the previous week and 42% from the four-week average. China was the lead buyer at 162,000 MT. Old-crop sales were below the bottom end of expectations ranging from 200,000 to 600,000 MT. USDA reported net sales reductions of 48,300 MT for 2023-24.
Wheat: Net sales of 193,600 MT for 2022-23 increased noticeably from the previous week but fell 5% from the four-week average. China was the lead buyer at 69,300 MT. Traders expected old-crop wheat sales of 100,000 to 350,000 MT. USDA reported net sales reductions of 10,200 MT for 2023-24.
CORN: May corn futures dropped below the 10-day moving average but held above Wednesday’s low during overnight trade. That level at $6.46 1/2 is near-term support, with additional support in the $6.44 3/4 to $6.36 3/4 range. Near-term resistance is in the $6.51 to $6.54 1/2 range.
SOYBEANS: May soybean futures violated the 40- and 50-day moving averages along with the psychological $15.00 level overnight, which triggered sell stops. Next support is the 100-day average at $14.93. Near-term resistance extends from $15.00 to the 5-day moving average at $15.11.
WHEAT: May SRW wheat futures held support at Wednesday’s low overnight. That level at $6.75 is near-term support. Near-term resistance starts at the 5-day moving average at $6.87 3/4.
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open higher on support from strong cash fundamentals. Cash cattle trade started around $170 in the Southern Plains and as high as $178 in the northern market on Wednesday – up sharply from last week in both regions. April live cattle futures finished yesterday basically in line with last week’s average cash price, so the strong cash trade should be supportive. The question is how aggressively traders want to push long positions and whether some profit-taking develops ahead of the extended weekend. Wholesale beef prices firmed 68 cents for Choice boxes and 21 cents for Select on Wednesday. Movement was decent at 102 loads.
USDA reported net beef export sales of 13,500 MT for 2023, up 20% from the previous week and 1% above the four-week average.
HOGS: Lean hog futures are expected to open mostly firmer on corrective buying and support from strong weekly export sales. But buyer interest may be limited as cash fundamentals continue to weaken. The CME lean hog index extended its price slide for a 13th consecutive day, falling another 76 cents to $73.91 (as of April 4). April lean hog futures finished Wednesday 51 cents below that level. The premium in June hogs is now less than $15.00, though that signals traders anticipate a stronger-than-normal seasonal rally once the cash market finds its secondary low. The five-year average rise in the cash index from now until mid-June is just under $10.00. The pork cutout value extended its downtrend, dropping another 29 cents on Wednesday.
USDA reported net pork export sales of 53,200 MT for 2023, a marketing-year high. Pork sales jumped 75% from the previous week and 69% from the four-week average. China was the lead buyer at 20,200 MT.
