GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 to 3 cents lower.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each traded in relatively tight ranges overnight following Monday’s big price swings. Uncertainty regarding trade policy is likely to lead to continued volatile trade. Outside markets are mixed this morning as front-month crude oil futures are higher while the U.S. dollar index is up around 250 points.
A European Union assessment found that President Trump’s new tariff policy will increase levies on some of the EU’s exports, including cheese and some agricultural products, above the level permitted in their trade agreement, Bloomberg reported. “The European Commission, which handles trade matters for the bloc, told lawmakers Monday that the new global tariff will be added to levies that are already in place, according to Bernd Lange, chair of the European Parliament’s trade committee. The new cumulative rate means some goods would be above the 15% ceiling the EU and US agreed to in their trade deal,” said the report. Meanwhile, The U.S. is preparing to launch investigations into the impact of imports on various products, including batteries and industrial chemicals, under Section 232 of the Trade Expansion Act of 1962. “The administration plans to impose new tariffs based on national security concerns, as the president can impose levies under Section 232 authority. The U.S. Trade Representative said the president will also initiate probes under Section 301 of the Trade Act of 1974 to counter discriminatory actions by trading partners, covering areas such as industrial excess capacity and digital services taxes,” said Bloomberg. Trump’s new 10% global tariffs went into effect today, kicking off an effort to preserve his trade agenda after the court decision. The White House is working on a formal order that will increase the global tariff rate to 15%, according to an administration official.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, when asked about fierce competition across the financial industry, said he’s starting to see parallels to the era before the 2008 financial crisis, when a rush to make loans ended disastrously. “Unfortunately, we did see this in ’05, ’06 and ’07, almost the same thing — the rising tide was lifting all boats, everyone was making a lot of money,” Dimon told investors on Monday, Bloomberg reported. While JPMorgan isn’t willing to make riskier loans to boost net interest income, he said, “I see a couple people doing some dumb things. They’re just doing dumb things to create NII.” Dimon, who led the largest U.S. bank through the 2008 financial crisis and scooped up two major competitors that collapsed, said he expects the credit cycle will eventually sour again — though he is not sure when.
The U.S. Supreme Court’s decision to strike down President Trump’s sweeping tariffs may drive up cargo volume, Port of Los Angeles Executive Director Eugene Seroka said and as reported by Bloomberg. “If that effective tariff rate for some companies and importers is lower, we may see some cargo really shoot through the system pretty quickly,” he said in a Bloomberg Television interview. While import patterns have fluctuated based on trade policy announcements, exports have consistently suffered, with shipments to China dramatically reduced. The head of the nation’s busiest container gateway cited an 80% drop in soybean shipments from his port, adding that exports have declined in nine of the last 13 months.
CORN: May corn futures traded in a tight range overnight. Resistance stands at the 40-day moving average at $4.40 1/4 on a push higher, while support stands at $4.38 1/2.
SOYBEANS: May soybeans are trading near 10-day moving average support at $11.42 3/4.A close below that mark would be a bearish indication. Resistance stands at $11.50 on resurgent strength.
WHEAT: May SRW futures saw additional consolidation overnight. Resistance stands at yesterday’s high of $5.83 1/2. Support comes in at $5.70 then $5.62 on a turn lower.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone as supportive fundamentals continue to underpin prices. Followthrough selling pressure from Monday could limit gains, but persistent strength in cash cattle should limit much additional selling. Last week, cash trade averaged $246.91, up $1.29 from the prior week. Choice beef is heading near the upper end of the recent range, rising $2.52 Monday to $369.22.
HOGS: Lean hogs are expected to open with a mostly firmer tone in a continuation of recent strength. Losses in cattle futures limited strength on Monday but cash fundamentals in hogs remain supportive. The CME lean hog index is up another 22 cents to $88.17 as of Feb. 20. Pork cutout is now trending higher as well as cutout is up another $1.79 to $97.40, helping drive strength in futures.