Ahead of the Open | March 8, 2022
Corn: 2 to 6 cents lower in old-crop, 3 cents higher new-crop
Soybeans: 10 to 24 cents higher.
Wheat: May SRW sharply higher, other contracts 4 to 24 cents lower.
GENERAL COMMENTS: Winter wheat futures finished lower overnight in all but the May SRW contract, which posted a huge trading range and a contract high for the sixth session in a row. Corn futures were also lower, while soybeans ended higher overnight. Malaysian palm oil futures rose 3.1% and Nymex crude oil futures are up around $5 amid talk the U.S. will ban imports of Russian oil. U.S. stock index futures project a mixed open this morning, while the U.S. dollar index is weaker.
China continued a string of U.S. soybean purchases that began in late January. USDA reported daily soybean sales of 132,000 MT for delivery to China during the 2022-23 marketing year and 126,000 MT to “unknown destinations” for 2021-22. Since Jan. 28, USDA has reported a combined 6.22 MMT of soybean sales to China or unknown destinations, a more than nine-fold increase from the previous month. USDA also reported a daily sale of 193,000 MT of hard red spring wheat for delivery to the Philippines in 2022-23.
Ukraine and Russia have agreed on one evacuation route so Ukrainians can safely leave the region. Several previous attempts to evacuate civilians failed, with Western leaders accusing Russian forces of continuing to target pre-approved safe routes. The U.S. is willing to move ahead with a ban on Russian oil imports without the participation of allies in Europe, two people familiar with the matter told Reuters. The White House is also negotiating with U.S. congressional leaders who are working on fast-tracking legislation that would ban Russian imports, a move that is forcing the administration to work on an expedited timeline.
Rising corn and wheat prices amid the crisis in Ukraine encouraged Brazilian exporters to recently book corn and wheat shipments, despite tight supplies and strong domestic prices. Export sources told Reuters about 500,000 MT of Brazilian corn was booked for export out of Parana, while 100,000 MT of wheat was sold from Rio Grande do Sul.
Crop Consultant Dr. Michael Cordonnier made no changes to his South American crop estimates this week. For Brazil, Cordonnier estimates production at 124 MMT for soybeans and 112 MMT for corn. In Argentina, he pegs the crops at 39 MMT for soybeans and 49 MMT for corn. His Paraguay soybean crop remains at 5 MMT.
Highly pathogenic avian influenza was confirmed in a commercial turkey flock in Buena Vista County, Iowa on Monday. Last week, the state reported a case of bird flu in a backyard poultry flock in Pottawattamie County in southwestern Iowa.
Iran tendered to buy 60,000 MT each of corn, soymeal and feed barley from unspecified origins. South Korea passed on a tender to buy up to 130,000 MT of feed wheat as prices were deemed too high. Tunisia rejected all offers in a tender to buy 125,000 MT of milling wheat and 100,000 MT of feed barley because prices were too high.
CORN: May corn fell as low as $7.28 3/4 overnight after dropping 3 1/2 cents yesterday to $7.50 3/4. Losses in wheat futures likely will further pressure corn, potentially prompting speculative funds to ramp up long liquidation. Initial support in May futures is seen at the 10-day moving average at $7.17, followed by $7.00. Friday’s contract high at $7.82 1/2 marks key resistance.
SOYBEANS: May soybean futures rose as high as $16.96 3/4 overnight after falling a penny yesterday to $16.59 1/2. The market continues to run into stiff resistance just under $17 as traders await tomorrow’s USDA Supply and Demand Report, which is expected to show further cuts to South America’s crop outlook.
WHEAT: May SRW wheat posted a contract high at $13.63 1/2 overnight, while deferred contracts traded lower. Deferred HRW and spring wheat contracts were also lower overnight.
CATTLE: Live cattle may extend yesterday’s corrective bounce on prospects the market may be near a short-term bottom following sharp declines the past two weeks. High retail prices and the Russia/Ukraine war have stoked concerns over beef demand, but retailers may step up buying soon for post-Lent features. Overnight weakness in corn futures may boost the feeder cattle market. Choice cutout values rose 38 cents yesterday to $254.71, up from an 11-month low at the end of last week. Movement totaled 102 loads. Cash cattle averaged $140.61 last week, down $2.61 from the previous week and the first weekly decline in the past five.
April live cattle rose $2.125 yesterday to $137.90, while April feeders gained $2.425 to $159.675.
HOGS: Lean hog futures may extend yesterday’s drop to four-week lows on indications prices established a late-winter high and the market has slipped into a period of seasonal weakness. The CME lean hog index is down 29 cents today (as of March 4) to $99.28, the third consecutive daily decline. Seasonally, hog prices typically weaken in late winter before rallying to a summertime high. Pork carcass cutout values jumped $2.66 yesterday to $106.65, led by gains in hams. Movement was decent at 311 loads. April lean hog futures fell 17.5 cents yesterday to $100.275, the lowest closing price since Feb. 4.