GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each traded in relatively tight ranges overnight, making up Monday’s losses but finding resistance near yesterday’s highs. Some positioning is likely ahead of today’s supply and demand report from USDA. Analysts expect little change in the U.S. balance sheets. Any change would come on the demand side. Key will be how USDA responds to recent rhetoric around China increasing 2025-26 exports. In corn, USDA could adjust use higher but little change seems likely given February is typically a less significant report. Outside markets are quiet this morning as front-month crude oil futures and the U.S. dollar index are both trading near unchanged.
The U.S. Environmental Protection Agency plans to repeal a policy that provides the legal foundation for rules regulating greenhouse gas emissions, Bloomberg reports. “The policy to be repealed is the Obama-era endangerment finding, a scientific determination that greenhouse gases endanger human health and welfare. A decision to repeal the finding is expected to lay the groundwork for a further unwinding of climate protections in the U.S. and has been opposed by scientific experts and environmental groups,” said the report. The ruling could come as early as Wednesday, according to a person familiar with the details, Bloomberg said. The policy underpins rules including federal emissions standards for cars and trucks. “This amounts to the largest act of deregulation in the history of the United States,” EPA Administrator Lee Zeldin was quoted as telling the Wall Street Journal, which first reported the planned timing, Bloomberg said.
President Trump says his pick to lead the Federal Reserve can boost the U.S. economy to grow at a rate of 15%, “an exceedingly rosy target that nonetheless underscores the pressure that Kevin Warsh will face if confirmed to the role,” Bloomberg said in a report. Trump, speaking in an interview with Fox Business, said Warsh was the “runner up” in his last search and that it was a big mistake to pick Fed chair Jerome Powell. If Warsh “does the job that he’s capable” of, then “we can grow at 15%, I think more than that,” Trump told host Larry Kudlow in a clip aired Monday. “I think he is going to be great, and he’s a really high-quality person.” It was not fully clear if Trump was referring to year-over-year growth or some other metric. The U.S. economy, which is seen expanding 2.4% this year, has grown at an average annual rate of 2.8% over the past five decades, said Bloomberg.
Russia is exploiting negotiations to end the war in Ukraine as a “tool for manipulation” with no intention of ending the invasion, according to an assessment by Estonian foreign intelligence and as reported by Bloomberg. “The Kremlin’s main objective is to restore full relations with the U.S., which would open the possibility of direct flights and visas for the business elite, as well as easing the path for espionage and influence operations. Russia is highly likely preparing for future conflict even as its war against Ukraine continues, and its military-industrial complex will continue to be a danger to its neighbors even after a peace deal might be agreed,” said the Bloomberg report.
CORN: March corn futures are in the lower end of the recent upward sloping channel on the daily bar chart. Bulls are challenging resistance at $4.30 1/2 this morning, while additional strength looks to overcome resistance at $4.33 1/4. Support comes in at $4.27 on a push lower, with a close below that mark indicating a technical breakdown on the daily bar chart.
SOYBEANS: March soybeans made up Monday’s loss overnight. Bulls are eyeing resistance at $11.25 on persistent strength. Support comes in at yesterday’s low of $11.06 then the psychological $11.00 mark on a push lower.
WHEAT: March SRW futures continue to bounce off staunch support at $5.26. That has limited the downside over the past week. A break below that mark has bears eyeing support at $5.22 1/4. Meanwhile, resistance stands at $5.33 on a bounce.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a firmer tone in a continuation of recent strength. Strong technical support persists under the market and continues to support higher prices. That is bolstered by robust fundamental support. Last week’s cash cattle average boasted another week-over-week gain, rising another $1.87 to $241.31. Meanwhile, wholesale beef continues to struggle garnering any momentum, as choice slid $1.57 to $367.76 Monday.
HOGS: Lean hogs are expected to open with a mostly firmer tone, supported by technical strength. Bulls are looking to defend support under the market but a lagging cash market could entice sellers to push prices lower. The CME lean hog index is down 11 cents to $86.46 as of Feb. 6. While the cash market continues to trend higher, daily gains have been rather small. Pork cutout rose $2.06 to $95.83 Monday, led by gains in butts, ribs and bellies.