GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 5 to 7 cents higher.
Wheat: Winter wheat 2 to 4 cents higher; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each recovered some of Monday’s losses overnight. Bulls are looking to build on those gains and continue the recent uptrends on the daily bar chart. Soybeans look most at risk from a technical perspective, but saw the biggest overnight gains. Front-month crude oil futures are building strength over the psychological $60.00 mark, while the U.S. dollar index continues to slide.
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President Trump comes to Clive, Iowa today to talk about the economy and energy, with speculation running high for a biofuels-related announcement after farm groups were angered last week over the failure of lawmakers to include year-round E15 approval in funding legislation. Ahead of Trump’s midday visit, the Clean Fuels Alliance urged the president to release proposed rules for the 45Z Clean Fuels Production tax credit. The call comes after the Office of Management and Budget completed a review of the proposed rules. “Our progress is threatened by delays in policy decisions that should have been made by the preceding administration. We anticipate that you will quickly finalize these policies and secure your promise as the most pro-biofuel president in history,” the group said in a letter to Trump.
China has ramped up its orders for Brazilian cargoes of soybeans after meeting an initial shipment volume from the U.S. as part of a trade truce with Washington reached last fall. “In the past week, importers have booked at least 25 cargoes of the beans for loading mainly in March and April, driven by margins, according to traders with knowledge of the deals. At the same time, state-owned companies have appeared to refrain from taking U.S. cargoes, said the people, who declined to be named as they were not authorized to talk to the media,” Bloomberg reported. China has purchased about 12 million tons of U.S. soybeans in the last three months, meeting a commitment outlined by the Trump administration in November. “It makes complete sense to step up purchases of Brazilian soybeans after meeting the U.S. pledge,” said Meng Zhangyu, an analyst at Wuchan Zhongda Futures Co. “Brazilian supplies are much cheaper.” Over the longer term, the U.S. said China has committed to buying at least 25 million tons of U.S. soybeans annually through 2028, and the nation may come back for more U.S. soybean cargoes later this year.
CORN: March corn futures made up most of Monday’s loss overnight. Resistance stands at $4.31 1/2 on persistent strength, while support comes in at $4.28 on a reversal back lower.
SOYBEANS: March soybeans found support at $10.61, the 10-day moving average, overnight. Bulls are seeking to close prices above $10.72 1/4 on persistent strength.
WHEAT: March SRW futures rebounded overnight. Strong support persists at $5.20 3/4, the 40-day moving average, while bulls are looking to break prices above stiff resistance at $5.33 1/2, the 100-day moving average.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone in a continuation of recent strength. Bulls are eyeing resistance near $237.00, which capped most of the upside in early January. Bulls have been impressed by persistent strength in the cash market, as the weekly cash average gained another $2.20 to $234.70. Wholesale beef ended Monday mixed as choice fell 2 cents to $368.90 while select surged $4.73 to $367.12.
HOGS: Lean hogs are expected to open with a mostly firmer tone in a continuation of recent strength. While nearby contract fell under pressure Monday, deferred contracts saw persistent strength, continuing to break contract highs. The CME lean hog index is up another 39 cents to $84.01 as of Jan. 23. Pork cutout continues to grind higher, rising another $1.51 to $97.26 Monday, led by strength in ribs.