GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: 4 to 6 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each saw a continuation of Friday’s selling pressure during the overnight session. Corn is near firm support, which will be key to watch today. Outside markets remain volatile with front-month crude oil futures down sharply this morning. The U.S. dollar index is up over 400 points and has made up most of last week’s big drop.
Ag commodity futures traders on Friday could not help but keep their eyes glued to record-setting price downdrafts and extreme volatility in gold and silver futures markets. The same could be the case today. Silver’s 26% plunge on Friday was the biggest on record, while gold dropped 9% in its worst day in more than a decade. Overnight, March silver dropped to a low of $71.20 an ounce, after last Thursday hitting a record high of $121.785. April gold futures overnight hit a low of $4,423.20 an ounce after last Thursday hitting a record high of $4,626.80. Both metals had posted solid rebounds from the overnight lows, as of this writing. The CME Group over the weekend again raised margin requirements for the two metals futures contracts. Traders in stock and financial markets are also spooked by the mammoth plunges and extreme volatility in gold and silver prices, with global stock markets lower overnight. Part of the pressure on the metals was due to President Trump on Friday nominating Kevin Warsh to lead the Federal Reserve, which sent the U.S. dollar index higher. Warsh has been known to be more hawkish on U.S. monetary policy.
The federal government went into a partial shutdown over the weekend while waiting for the U.S. House of Representatives to approve a funding deal President Trump worked out with Democrats. “The funding lapse is likely to be short, with the House returning from a break on Monday and the Republican president fully supporting the spending package. The shutdown affects agencies including the Treasury, Defense, Homeland Security, Transportation, Health and Human Services and Labor Departments, but some parts of the government are already fully funded through the end of the federal fiscal year,” Bloomberg reported.
CORN: March corn futures saw followthrough selling overnight. Bulls are looking to maintain prices above key support at $4.25. Resistance would be found at $4.30 1/2 on resurgent strength.
SOYBEANS: March soybeans continue to fall under selling pressure. Support stems from the psychological $10.50 mark on additional selling. Bulls are looking to reclaim resistance at $10.64, which is reinforced by $10.71 1/4.
WHEAT: March SRW futures saw additional profit-taking overnight. Bulls are seeking to hold prices above the 100-day moving average at $5.33 1/2. Additional selling finds support at $5.28 1/2. Resistance stands at $5.41 1/2 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone. Bulls were likely encouraged by Friday’s Cattle Inventory report from USDA. USDA semiannual U.S. cattle inventory report shows shrinking supply—lowest in 75 years. There were 86.2 million head of cattle and calves on U.S. farms as of Jan. 1, according to Friday afternoon’s twice-yearly cattle inventory report published by USDA’s National Agricultural Statistics Service (NASS). That’s the lowest level since 1951. Other key findings in the report saw that of the 86.2 million head inventory, all cows and heifers that have calved totaled 37.2 million. There are 27.6 million beef cows in the U.S. as of Jan. 1, down 1% from last year at the same time. The number of milk cows in the U.S. increased to 9.57 million. The U.S. calf crop was estimated at 32.9 million head, down 2% from previous year. Cash trade picked up going into Friday with trade taking place at higher prices. That is likely to support futures this week, as last week’s average looks to surge above nearby futures. Meanwhile, wholesale beef continues to fall under pressure, further pushing packer margins into the red.
HOGS: Lean hogs are expected to open with a mostly weaker tone in a continuation of recent selling pressure. The hogs market is a bit of a tale of two markets. The front-end of the market has fallen under pressure recently while summer futures are still trading near contract highs. That could be an indication the recent pullback is more technical related than fundamental. The CME lean hog index is up another 6 cents to $85.78 as of Jan. 29. Pork cutout rose 79 cents to $94.22 Friday, led by strength in hams.