Ahead of the Open | March 23, 2023
GRAIN CALLS
Corn: 2 to 6 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW 8 to 12 cents higher; HRS 5 to 10 cents higher.
GENERAL COMMENTS: Corn futures built on Wednesday’s corrective gains overnight, while soybeans and wheat bounced after recent sharp losses. Corn should find support from strong weekly export sales and another daily sale to China. But those figures were disappointing for soybeans and wheat, which could dry up corrective buyer interest during daytime trade. Outside markets are modestly price-negative, with crude oil mildly weaker and the U.S. dollar index trading just above unchanged – but not enough to have much influence on grain and soy trade this morning.
USDA reported daily corn sales of 123,000 MT to China for 2022-23. Since March 14, USDA has reported daily old-crop corn sales to China totaling 2.548 MMT. Of that total, 2.111 MMT was reported in this morning’s data for the week ended March 16.
Interior northern Cordoba to northern and central Entre Rios, Argentina received additional heavy rainfall Wednesday and overnight, according to World Weather Inc. Additional waves of rain will impact central and northern Argentina over the next week to 10 days, bringing beneficial moisture to late-developing crops. Central Brazil will continue to dry down, improving conditions for late soybean harvesting and safrinha corn planting from Mato Grosso do Sul and Parana to Minas Gerais.
Brazilian oilseed crushers association Abiove raised its soybean crop forecast for the country by 1 MMT to a record 153.6 MMT, citing strong yields and increased acreage. Abiove raised its 2022-23 Brazilian soybean export forecast by 300,000 MT to a record 92.3 MMT.
Export sales for the week ended March 16:
Corn: Net sales of 3.096 MMT for 2022-23 were a marketing-year high and sharply higher than both the previous week and the four-week average. Traders expected old-crop sales between 1.7 MMT and 3.4 MMT for 2022-23. China was the lead buyer at 2.245 MMT, including 2.111 MMT reported via daily sales. Japan was also a large buyer at 683,000 MT. USDA reported net sales of 93,000 MT for 2023-24. Exports totaling 1.381 MMT were also a marketing-year high.
Soybeans: Net sales of 152,500 MT for 2022-23 fell 77% from the previous week and 55% from the four-week average. Sales were much lower than the pre-report range of estimates from 400,000 to 900,000 MT for 2022-23. China was the lead buyer at 137,700 MT. There were net sales of 199,000 MT for 2023-24 – 132,000 MT to unknown destinations and 67,000 MT to China.
Wheat: Net sales of 125,600 MT for 2022-23 fell 63% from the previous week and 59% from the four-week average. Sales were below the low end of pre-report expectations ranging from 140,000 to 550,000 MT for 2022-23. USDA reported net sales of 13,000 MT for 2023-24.
CORN: May corn futures pushed above last week’s high overnight and triggered buy stops. Next resistance is at $6.42 3/4 and $6.48 1/4. Previous resistance at $6.38 3/4 is initial support.
SOYBEANS: May soybean futures pivoted around Wednesday’s closing level overnight. Yesterday’s low at $14.43 1/4 is near-term support, with additional support in the $14.40 to $14.20 range. Overhead resistance is heavily layered from $14.65 to $14.80.
WHEAT: May SRW wheat futures posted an inside day up overnight after Wednesday’s sharp losses. Near-term resistance is in the $6.75 to $6.85 range. Wednesday’s low at $6.54 is near-term support.
CATTLE: Mixed.
HOGS: Mixed to lower.
CATTLE: Live cattle futures are expected to open with a mixed tone this morning. Cash cattle trade started around $1 lower in the Southern Plains on Wednesday, while trade in the northern market where market-ready supplies are tighter occurred at steady to $1 higher prices. April live cattle futures finished Wednesday nearly $2 below last week’s average cash cattle price, which should limit seller interest and could encourage light buying. Choice boxed beef prices firmed $1.38 on Thursday, while movement improved to 147 loads. That could be an early indication the wholesale market is working on a low. USDA reported net beef export sales of 18,600 MT for 2023, up 5% from the previous week and 59% above the four-week average.
USDA will detail frozen meat stocks at the end of February in this afternoon’s Cold Storage Report. The five-year average is a 14.7-million-lb. decline in beef stocks during the month.
HOGS: Lean hog futures are expected to open with a mostly lower tone. While futures are heavily oversold, there’s nothing that tells us the market can sustain any strength. In fact, fresh selling has surfaced on even a modest push to the upside over the past two weeks. The CME lean hog index is down another 84 cents, marking a $2.18 drop over the past three days. Despite a sizable discount to the cash index, April lean hog futures continue to drop, signaling traders anticipate more near-term cash weakness. The pork cutout value fell $1.66 on Wednesday. USDA reported net pork export sales of 38,000 MT for 2023, up 7% from the previous week and 8% above the four-week average. Mexico was the lead buyer at 18,400 MT, while China purchased only 1,200 MT.
USDA will detail frozen meat stocks at the end of February in this afternoon’s Cold Storage Report. The five-year average for pork stocks is a 35.4-million-lb. increase during February.
