Ahead of the Open | February 13, 2024
Corn: 1 to 3 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: 3 to 5 cents lower.
GENERAL COMMENTS: Corn futures saw modest corrective gains overnight, soybeans pivoted near unchanged and wheat reversed Monday’s gains. A hotter-than-expected CPI report sent risk assets reeling this morning after the Bureau of Labor Statistics released that core inflation rose .4% month-on-month, above expectations of .3%. Annual core inflation rose 3.9%, above expectations of 3.7% but steady with a month ago. That sent front-month crude oil futures off overnight highs and the U.S. dollar index to the highest level since Nov. 14 of last year, rallying on surging interest rates, as the market is pricing stickier inflation than expected.
South American crop consultant Dr. Michael Cordonnier cut his Brazilian soybean crop estimate 2 MMT to 147 MMT, noting continued disappointing yields as harvest progresses. Cordonnier lowered his Brazilian corn crop forecast 3 MMT to 112 MMT amid lower plantings for first-crop corn and expected smaller safrinha seedings. In Argentina, he cut his soybean and corn crop forecasts 2 MMT each to 50 MMT and 54 MMT, respectively, as recent heat and dryness stressed crops in the core production area. Cordonnier still expects total South American soybean production to rise 12.2 MMT (6.1%) from last year but now forecasts corn production will fall 5.1 MMT (2.9%).
Houthi rebels launched two missiles at a cargo ship bound for Iran in the Red Sea on Monday, causing minor damage but no injuries, according to U.S. military officials. The missiles were fired from Houthi-controlled areas in Yemen toward the MV Star Iris, a Greek-owned, Marshall Islands-flagged vessel carrying corn from Brazil to Iran. While a spokesman for the Houthi military claimed the ship was American, maritime data confirmed it as Greek-owned. This incident, the first of its kind targeting an Iranian-bound ship, saw the Houthis allegedly informing Iran beforehand.
Operations at the port of Antwerp, one of Europe’s biggest container ports, were seriously impacted on Tuesday as hundreds of farmers on tractors blocked the roads around the port demanding looser environmental rules and better protection against cheap imports. The delays this is causing for freight handling come on top of the problems that port companies are already experiencing as attacks on vessels in the Red Sea force shipping companies to stay away from the Suez Canal and opt for longer routes instead.
CORN: March corn futures saw corrective gains overnight. Initial resistance stands at $4.32 3/4 with backing from the 10-day moving average at $4.36 1/2. Meanwhile, support lies at $4.29, Monday’s contract low of $4.27 3/4, then the psychological $4.25 mark.
SOYBEANS: March soybean futures saw limited volatility overnight. Bulls are looking to close prices above the 10-day moving average at $11.97 1/4, backed by the psychological $12.00 mark then $12.10 3/4. Support stands at $11.88 1/2, $11.83 1/2 then $11.77 1/2.
WHEAT: March SRW futures continue to face choppy sideways trade. Bulls continue to struggle against resistance at $5.98 1/2 and $6.01 1/4, the 40-day moving average. Additional resistance lies at $6.04 3/4. Meanwhile, support lies at $5.90 1/4, $5.88 1/2 then $5.83 3/4.
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though corrective selling could limit gains after the open. April futures have traded relatively sideways for three consecutive sessions, with the highs from each session coming within 10 cents of each other. Recent big purchases of cattle, four straight weeks of cash gains totaling $7.68 and packer margins persisting in the red could limit their interest in buying cash cattle, likely pushing negotiations late into the week. Last week’s cash average surged $3.35 to $181.15- the highest level since the week ended Nov. 3 of last year. Wholesale beef prices firmed on Monday, as Choice rose 4 cents to $294.08 and Select jumped $1.94 to $287.04.
HOGS: Lean hog futures are expected to open with a mostly firmer tone as prices are seemingly attempting to forge a near-term bottom. April futures have spent the last three sessions bouncing from nearby technical support and rejecting from resistance, showcasing the uncertainty in the market. The April contract has fallen over $4.00 from the late-January peak and while the CME lean hog index showed relative weakness in the last week, it is likely that gains will persist throughout much of the spring, underpinning futures as strength reemerges in cash prices. The CME lean hog index is up a dime to $73.70 (as of Feb. 9), snapping a two-day skid. Wholesale pork prices jumped $2.57 to $88.54 on Monday, led higher by gains in hams and bellies, though movement was weak at just 223.7 loads.
