GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: Steady to 2 cents higher.
Wheat: 2 to 5 cents lower.
GENERAL COMMENTS: Wheat continues to see relative weakness, though prices continue to trade within last Friday’s range. Soybeans hit a fresh for-the-move high overnight but have since faced modest selling pressure. Corn was caught in the middle, straying little from unchanged. Outside markets are mixed this morning as front-month crude oil futures and the U.S. dollar index are both modestly higher.
Millions of private-sector workers without employer-sponsored retirement savings plans could gain access to new tax-advantaged plans similar to one in place for federal workers, President Trump pledged in his State of the Union speech Tuesday night. The new 401(k)-type plan would be modeled after the low-fee federal Thrift Savings Plan, or TSP, to remedy what Trump termed “the gross disparity” between the roughly 50% of the population who have access to workplace retirement savings plans and those who do not. Workers could get a matching contribution from the government of as much as $1,000 a year, Bloomberg reported. Trump delivered the longest State of the Union address in the television era, declaring “a turnaround for the ages” for the U.S. economy. Trump also said he would institute new tariffs using other legal authorities, noting that the new regime may be more complex. Trump also said Iran is working to reconstitute its nuclear program even as it negotiates with Washington, adding to speculation that he’s preparing for a fresh round of military strikes in the coming days. Iranian officials are “again pursuing their sinister ambitions,” Trump said in his State of the Union address.
Federal Reserve Bank of Boston President Susan Collins on Tuesday said U.S. interest rates are likely to stay unchanged “for some time” as recent economic data shows an improvement in the labor market, while risks to inflation remain. The labor market is showing “at least some more signs of an unusual kind of stability,” Collins said during a panel discussion hosted by the Boston Fed and as reported by Bloomberg. She also pointed to the need for more evidence that inflation is coming down toward 2%. “I think that it’s quite likely that it will be appropriate to hold the current range for some time,” she said. “After 175 basis points of easing over the past year and a half, we are at mildly restrictive, perhaps quite close to neutral already,” Collins said, referencing the level at which interest rates neither stimulate nor restrain the economy.
Russian and Iranian oil producers are offering deepening discounts as they compete for the same limited group of Chinese buyers after India retreated from purchases, Bloomberg said in a report. India’s imports from Russia could drop by 40% from January levels to around 600,000 barrels a day, according to a scenario from Rystad Energy. Much of the displaced cargoes are now heading east, spurring a price war with Iranian suppliers that have long been favored by China’s private refiners. Russia’s Urals grade is selling at around $12 a barrel below ICE Brent, according to traders familiar with such deals, compared with a $10 discount last month. Iranian Light is going for as much as $11 less than the global benchmark, they said, asking not to be named as they’re not authorized to speak to media, said Bloomberg.
CORN: May corn futures traded in a tight range overnight. Bulls are seeking to hold prices above $4.38, which limited the downside overnight. Resistance stands at $4.40 1/4, the 40-day moving average, on strength.
SOYBEANS: May soybeans hit a fresh high overnight. Bulls are eyeing resistance at $11.60, which has capped most gains the past couple weeks. Support comes in at $11.50 on profit-taking.
WHEAT: May SRW futures continue to pullback from recent gains. Still, prices are trading within Friday’s range. Support stands at $5.62 1/2 on continued selling pressure, while bulls are looking to reclaim the psychological $5.75 mark.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone, supported by strength in cash fundamentals. Choice beef surged $8.21 higher Tuesday to $377.43. Packers are seen as taking more control of the market, trying to beef up margins after months of cutting margins deep in the red. Cash trade has yet to initiate this week, giving little catalyst to the futures market.
HOGS: Lean hogs are expected to open higher as prices continue to work higher. April futures hit a two-week high yesterday in an impressive show of strength. The CME lean hog index is up another 18 cents to $88.35 as of Feb. 23. Bulls are looking to see strength build in the cash market, else another pullback is possible. Pork cutout slid 45 cents to $96.95 Tuesday, led by losses in picnics and hams.