GRAIN CALLS
Corn: 2 cents lower to unchanged
Soybeans: 4 cents lower to unchanged
Wheat: 2 cents lower to unchanged
GENERAL COMMENTS:
Grain markets were mostly quiet in the overnight session, with corn, soybeans, and wheat all fractionally to 2 cents lower. Outside markets are mixed this morning, with a slightly weaker U.S. dollar and lower to steady crude oil prices as well. Traders anticipate minimal adjustments to the major row crop balance sheets in tomorrow’s WASDE, with any changes to USDA’s export expectations and South American production likely to garner the most attention.
USDA reported 264,000 MT of soybeans for delivery to China during the 2025/2026 marketing year.
The January U.S. jobs report on Wednesday and the consumer price index, due Friday, are unusually close together on the calendar after the partial federal government shutdown delayed each by a few days. “The employment report will be even more substantive than usual. In addition to the monthly payrolls and unemployment numbers, each January release includes an annual revision to the jobs count. The so-called benchmark update is expected to reveal a notable markdown to payrolls growth in the year through March 2025,” Bloomberg reported. As for the regular monthly figures, economists predict payrolls rose 69,000 in January. The unemployment rate is seen holding at 4.4%, near a four-year high. In the CPI data, economists will look for more evidence that inflation is on a downward trend after previous reports were complicated by last year’s record-long government shutdown. Forecasters expect an underlying metric of inflation — which excludes food and energy costs — to rise at the slowest annual pace since early 2021. Government figures on Tuesday are projected to show another month of solid retail sales in December. The monthly USDA supply and demand report is also out at midday Tuesday. National Association of Realtors data due on Thursday will probably show sales of previously owned homes declined in January, said Bloomberg.
Chinese regulators have advised financial institutions to rein in their holdings of U.S. Treasuries, citing concerns over concentration risks and market volatility, Bloomberg reported today. Officials urged banks to limit purchases of U.S. government bonds and instructed those with high exposure to pare down their positions, but the directive doesn’t apply to China’s state holdings of U.S. Treasuries. “The move was framed around diversifying market risk rather than anything to do with geopolitical maneuvering or a fundamental loss of confidence in U.S. creditworthiness,” said the report. U.S. Treasury futures prices were modestly down overnight, following the China news.
CORN: March corn futures have been in a slow uptrend since mid-January, but are continuing to face resistance in the $4.35 area, the low-end of the pre-January WASDE trading range. Support is found at last week’s low of $4.24.
SOYBEANS: March soybeans are seeing a mild pullback after gaining 51 cents over the course of last week’s trade. Traders reacted positively to the news of China increasing soybean purchases another 8 MMT, but will likely need to see confirmed purchases to continue strength. Support lies at the $11.00 mark and further down at the 10-day moving average of $10.89. Initial resistance will stem from the psychological $11.25 level.
WHEAT: March SRW futures are trading slightly lower to sideways in the overnight. Short-covering that stemmed from weather concerns in recent weeks has slowed, limiting momentum. Wheat sees support at the 40-day moving average of $5.24, and faces resistance at last week’s early high of $5.40.
LIVESTOCK CALLS
CATTLE: Choppy/higher
HOGS: Choppy/higher
CATTLE: Live cattle futures are expected to open slightly firmer with cash trade continuing to firm and offer support. The April contract sits just above the 20-day moving average of $236.93 which offers some support, with firmer support lower at the 40-day moving average of $234.60. An increase in the imports of Argentine beef from 20,000 to 100,000 MT per year will have minimal impact on the larger supply picture.
HOGS: Lean hogs are expected to open slightly higher as technical and cash fundamentals continue to strengthen. Despite some mild profit-taking on Friday the technical outlook remains mostly bullish, with the April contract remaining above the 10-day moving average of $96.97. The most recent CME lean hogs index is up 32 cents to $83.38.