Ahead of the Open | March 17, 2023
GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 1 to 2 cents higher.
Wheat: 2 to 5 cents higher.
USDA reported another 191,000 MT of daily corn sales to China for 2022-23, bringing the four-day total to 2.111 MMT.
The Buenos Aires Grain Exchange slashed its Argentine soybean crop estimate another 4 MMT to 25 MMT. The exchange cut its Argentine corn crop estimate by 1.5 MMT to 36 MMT. The exchange rated the Argentine soybean crop 2% good/excellent (unchanged from the previous week), 23% fair (down four points) and 75% poor/very poor (up four points). It rated the country’s corn crop 7% good/excellent (up two points), 33% fair (down one point) and 60% poor/very poor (up one point).
World Weather Inc says rain is still projected for central Argentina Monday into Wednesday of next week with 0.75 to 2.50 inches likely with a few totals in excess of 3.00 inches possible especially from eastern Santa Fe into northern Uruguay and far southern Rio Grande do Sul, Brazil. Other areas in Argentina do not receive as much rain.
Brazil’s late safrinha corn planting and soybean harvesting are advancing better from Parana to southern Minas Gerais and in some southern Mato Grosso do Sul locations because of less frequent and less significant rain. World Weather says this pattern will prevail through the middle of next week before rain increases again.
The United Nations backed Turkey and Ukraine by calling for a 120-day extension of the Black Sea grain export deal. “For us, the text in the agreement is clear and it calls for a 120-day rollover,” UN spokesman Stephane Dujarric told Reuters. But Russian officials say the deal will be extended for 60 days. Alessandra Vellucci, director of the UN Information Service, said negotiations on an extension were continuing.
CORN: May corn futures extended this week’s strong corrective gains overnight. Near-term resistance is at the 20-day moving average just under $6.39. The 5- and 10-day moving averages at $6.26 and $6.25 1/2, respectively, are near-term support.
SOYBEANS: May soybean futures tried to build on Thursday’s corrective gains overnight. Near-term resistance is at Thursday’s high of $14.98, which was matched overnight, followed by the psychological $15.00 mark and the 10-day moving average at $15.03 3/4.
WHEAT: May SRW wheat futures extended this week’s corrective gains overnight but failed to find sustained buying above Wednesday’s high. Near-term resistance is the 20-day moving average near $7.11. Near-term support is at the 5-day moving average at $6.96 3/4 and the 10-day average near $6.91.
CATTLE: Choppy/higher.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open with a mixed to mostly firmer tone in a continuation of Thursday’s corrective gains after sharp loses earlier in the week. Weak cash fundamentals and macroeconomic concerns will limit buyer interest. Cash cattle traded $1 to $2 lower this week. Any remaining sales will likely wait until after this afternoon’s Cattle on Feed Report. Traders expect the report to show the feedlot inventory down 4.5% from year-ago to 11.62 million head. That would be the smallest March 1 inventory since 2017 when supplies were building. February placements are expected to be down 6.0% with marketings 4.4% lower than year-ago levels.
HOGS: Lean hog futures are expected to open lower on followthrough selling after Thursday’s technical meltdown. But if early seller interest is limited, we wouldn’t be surprised to see some corrective buying develop. Futures are short-term oversold and April futures fell to a discount to the cash index. The CME lean hog index is up 2 cents to $79.97 (as of March 15), 52 cents above the price April futures ended on Thursday. But any buyer interest is likely to be limited by falling wholesale pork prices. The pork cutout value fell another $1.89 on Thursday to $84.49, the lowest level since the end of February. Movement improved to 352.2 load, but the recent price drop suggests packers are having to cut wholesale prices to attract retailer demand.
