GRAIN CALLS
Corn: 5 to 7 cents higher.
Soybeans: 15 to 18 cents higher.
Wheat: 5 to 7 cents higher.
GENERAL COMMENTS: The grain and oilseed surged higher early in the overnight session but have since fell well off session highs. Premiums continue to creep in across the marketplace amid ongoing uncertainty stemming from the ongoing war in Iran. Crude oil futures surged above $100 last night and have held above that mark while the U.S. dollar index continues to inch higher, nearing $100.
The war in Iran is raising crop prices worldwide. ”Palm oil prices surged as much as 10%, soybean oil jumped and wheat neared a two-year peak as the war in the Middle East drove energy and fertilizer costs higher and threatened to tighten supplies across agricultural markets,” Bloomberg reported overnight. “Disruptions to crude oil supplies wrought by the conflict are boosting the appeal of crop-based biofuels, lifting demand for vegetable oils and corn. The effective closure of the Strait of Hormuz — a major conduit for the fertilizer trade — has also led to a spike in the price of crop nutrients as farmers rush to secure supply. In addition, wartime food security concerns could spark some countries to stock up on staples like wheat,” said the report. Palm oil prices jumped the most since 2022, when top grower Indonesia halted exports. “Grain and oilseed markets are following energy in early Monday trading,” said Joe Davis, director at Futures International, a brokerage. “The macro and energy markets will continue to lead ag commodities on any escalation of the war on Iran,” he said and as reported by Bloomberg. Vegetable oils and meal in China also surged on Monday. The most actively traded soybean meal futures on the Dalian Commodity Exchange rallied as much as 6% to 3,066 yuan per ton while palm also rose to hit a daily limit. Rapeseed oil and meal did the same in Zhengzhou.
Optimism for a quick resolution of the conflict in the Middle East is rapidly ebbing in financial markets, with investors pricing in a deeper and longer-lasting supply shock, Bloomberg reports. “The shift in market sentiment gathered pace after President Trump said parts of Iran had yet to be attacked and that $100 crude was ‘a very small price to pay’ for ‘safety and peace,’ undercutting hopes the conflict would be relatively contained. Investors have had to increase their probability of the worst-case scenario, with the challenge being the stagflationary nature of the shock and are now bracing for a long winter with no clear timeline of an end to it,” said the report. Meantime, International Monetary Fund Managing Director Kristalina Georgieva said lengthy hostilities in the Middle East would risk hitting markets and economies, while throwing up unexpected challenges that require policymakers to prepare for a “new normal.” Georgieva said a 10% increase in energy prices persisting for a year would push global inflation up by 40 basis points and slow economic growth.
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CORN: May corn futures are trading near session lows, though are still up on the session. Gains stalled at stiff $4.75 resistance, while bulls are looking to hold support at $4.60 1/2. Weakness below that market finds support at $4.53 1/2.
SOYBEANS: May soybeans gapped higher overnight. Bulls are eyeing resistance at $12.25 on continued strength. Support stands at the psychological $12.00 mark on a turn lower.
WHEAT: May SRW futures favored the upside overnight but are well off session highs. Resistance stands at $6.25 then the overnight high of $6.41 3/4. Support comes in at $6.16 3/4 then the psychological $6.00 mark.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open higher amid the overall bullish tone across the commodity space. Surging crude oil futures helped lead strength in the grain and oilseed markets overnight. Cattle futures remain somewhat volatile amid a lack of direction from the cash market. Into Friday, cash cattle trade remained abysmal, though trade picked up Friday. Last week’s average will be released midday. Wholesale beef continues to chip higher as choice cutout rose another 33 cents to $387.22 Friday.
HOGS: Lean hogs are expected to open higher amid a favorable risk-on tone in the commodity space. Losses late last week were stalled by the 10-day moving average at $95.50 which remains firm support under the market. The CME lean hog index continues to work higher as well as the index is up another 19 cents to $90.74 as of March 5. Pork cutout meanwhile slid 95 cents to $98.27 Friday, led by losses in loins and butts.