Ahead of the Open | April 4, 2022
GRAIN CALLS
Corn: 8 to 12 cents higher.
Soybeans: 8 to 13 cents higher.
Wheat: 20 to 25 cents higher.
USDA reported daily sales of 1.084 MMT of corn to China, with 676,000 MT for delivery during the 2021-22 marketing year and 408,000 MT for 2022-23.
Ukrainian grain exports in March were four times less than February levels due to the Russian invasion, Ukraine’s economy ministry said yesterday. March grain shipments overseas included 1.1 MMT of corn, 309,000 MT of wheat and 118,000 MT of sunoil, the ministry said. Ukraine was the world’s fourth-largest grain exporter in 2020-21 season, according to International Grains Council data, with most of its commodities shipped out via the Black Sea. But with war closing ports, traders are being forced to transport most grain exports by rail.
Ukraine’s projected spring crop plantings will probably total 13.4 million hectares this year, about 21% under 2021, the country’s ag ministry said on its website. Planting has begun in 21 of 24 regions, not counting annexed Crimea. That’s more than this time last year due to favorable weather.
Opening CRP land to crop production not a feasible option, USDA Secretary Tom Vilsack said in a letter to Mike Seyfert, President and CEO of the National Grain and Feed Association. In the letter, Vilsack addressed why opening CRP land to crop production is not a viable option to ease global grain supply concerns from the war in Ukraine. “CRP acres are disproportionately non-prime cropland, with more than 75% of acres from less productive, non-prime farmland,” Vilsack said. Additionally, a considerable proportion of currently enrolled CRP acres are in areas experiencing significant drought.
USDA will release its first winter wheat crop condition ratings this afternoon. Based on individual state ratings, the “good” to “excellent” rating should be in the mid-30% range.
Large speculators in late March cut their bullish bets in soybean futures and options to the lowest level since Feb. 1, the Commodity Futures Trading Commission data showed. In corn, the managed money net long fell for the first time in four weeks, while in SRW wheat, the managed money net long fell slightly.
Kazakhstan is considering temporarily limiting grain and flour exports, according to the country’s ag minister, without giving any specifics. The minister says the country wants to ensure its domestic needs are covered before allowing exports.
Iowa confirmed four new cases of highly pathogenic avian influenza (HPAI) in commercial poultry operations. The agency reported confirmed cases in commercial layer chickens in Osceola County, commercial turkeys in Cherokee County, commercial turkeys in Sac County and commercial breeding chickens in Humboldt County.
Saudi Arabia purchased 625,000 MT of optional origin wheat. Iraq purchased 100,000 MT of wheat expected to be sourced from Germany. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
CORN: May futures rose as high as $7.48 1/2 overnight after dropping 13 3/4 cents Friday to $7.35, down 19 cents for the week amid active bull spread unwinding. Initial support is seen at Friday’s low of $7.30 1/4, with further support at last week’s low of $7.13 1/2. Initial resistance is seen at Friday’s high of $7.51 1/2.
SOYBEANS: May soybean futures firmed as high at $16.00 1/4 overnight after falling 35 1/2 cents Friday to $15.82 3/4, down $1.27 1/2 for the week.
WHEAT: May SRW wheat firmed around 20 cents overnight but traded within Friday’s range after falling 21 1/2 cents Friday to $9.84 1/2, down $1.17 3/4 for the week.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures may face pressure from a soft close Friday, but strength in wholesale beef may limit price declines. Wholesale beef rose last week, with Choice cutout values up $4.50, but retailer buying was light. Grocers likely will start buying beef more aggressively as they build inventories for features at the end of Lent and early in the grilling season. Cash cattle averaged about $139.36 last week, up from $138.95 the previous week. April live cattle fell 72.5 cents Friday to $138.65 and June fell 1.275 cents to $135.85, weekly losses of $1.825 and $1.525, respectively.
HOGS: Lean hog futures may face carryover pressure from poor technical closes last week. Whether funds actively liquidate long positions or if buyers show up under the market will be key to price direction. Weakness in wholesale pork may also weigh on futures. June lean hogs fell 17.5 cents Friday to $120.45, down $5.40 for the week and posted a bearish weekly low close, potentially confirming a key reversal down. The CME lean hog index is down 50 cents today (as of March 31) to $102.63.
