Ahead of the Open | April 11, 2022

GRAIN CALLS

Corn: 6 to 8 cents higher.

Soybeans: 5 to 8 cents lower.

Wheat: HRW and SRW 14 to 19 cents higher, spring wheat 12 to 14 cents higher.

GENERAL COMMENTS: Corn futures rose to a five-week high overnight and winter wheat futures hit a two-week high amid ongoing concerns over supply disruptions from the Russia/Ukraine war. Soy complex futures fell as Nymex crude oil tumbled to the lowest level since late February. Malaysian palm oil futures ended near two-week high on smaller inventories. U.S. stock index futures signal a weaker open, while the U.S. dollar index is slightly firmer this morning.

USDA reported daily corn sales totaling 1.02 MMT to China, with 680,000 MT for 2021-22 and 340,000 MT for 2022-23.

A “major winter-like storm” will hit the Northern U.S. Plains, upper U.S. Midwest and southeastern Canada’s Prairies this week producing blizzard conditions and resulting in travel delays and a serious risk to livestock, World Weather Inc. said. The storm is expected to run from tonight into Thursday impacting most areas from Montana and northeastern Wyoming to Minnesota, southern Manitoba, Canada and possibly the extreme southeastern corner of Saskatchewan. Tuesday and Wednesday will be stormiest.

Ukraine’s grain traders union UGA expects wheat production to plunge around 45% to 18.2 MMT and corn output to fall 38% to 23.1 MMT this year due to fallout from the war with Russia. UGA expects the country to export 10 MMT of wheat and 20 MMT of corn in 2022-23. UGA says the country is currently able to export 600,000 MT of grains and oilseeds per month, though that capacity could increase to 2 MMT. Before the war with Russia, Ukraine could export up to 6 MMT of grains and oilseeds per month.

Large speculators expanded their bullish bets in corn and soybean markets in early April while scaling back in winter wheat, based on data from the Commodity Futures Trading Commission. The managed money net long in corn rose by 7,702 futures and options contracts during the week ended April 5 to 362,306 contracts. The net long in SRW wheat fell 5,480 contracts to 13,959 contracts, the lowest since the week ended March 1.

Kazakhstan plans to restrict wheat and wheat flour exports from April 15 until June 15, the country’s ag ministry said. Earlier this month the ministry said it plans to limit wheat and wheat flour exports to 1 MMT and 300,000 MT, respectively.

China sold 527,622 MT of state-owned wheat, or 95.4% of the total volume put up for auction. The average selling price dropped to 2,709 yuan ($425) per MT, down from 2,857 yuan ($449) the previous week.

CORN:May corn futures overnight reached $7.75 1/2, the highest intraday price since $7.80 1/4 on March 7, after gaining 33 3/4 cents last week. December corn hit $7.23 1/4, a contract high for the second session in a row. Price direction in corn this week will be influenced by the wheat market and speculative money flow, with increasing focus on U.S. planting progress, which USDA will update after the close today. The corn crop was 2% planted as of April 3, even with the five-year average.

SOYBEANS: May soybeans faded after climbing overnight to $16.97 1/2, the highest intraday price since March 28, after surging $1.06 1/4 last week following USDA cuts to South American production and U.S. ending stocks forecasts. Slumping crude oil may weigh on the soy complex, as well as expectations a slow start to U.S. corn planting may lead to higher soybean acres.

WHEAT: July SRW wheat overnight reached $10.86 1/4, the highest intraday price since $10.99 on March 25, after jumping 74 cents last week. July HRW futures hit $11.35 1/2. Prices gained a boost late last week following USDA’s larger-than-expected reduction to projected 2021-22 ending global wheat supplies.

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weaker

CATTLE:Live cattle futures may find support early this week from wholesale beef market strength and expectations for stepped-up retailer buying ahead of the spring grilling season. Meatpackers sharply increased slaughter last week to an estimated 676,000 head, up 37,000 head from the previous week. Choice cutout values ended last week at $270.47, up $3.33 from the previous week. Live steers averaged $138.77 for the week through Friday morning, down 55 cents from the previous week's average. Cash cattle have been largely flat for the past five weeks, and while feedlots may hope for firmer cash prices this week, it’s more likely the market will hold relatively steady. Steady cash trade would be seen as negative by bulls, but with spring- and summer-month contracts trading below the cash market, it should limit seller interest in those contracts.

June live cattle ended last week at $133.825, down $2.025 for the week. May feeder futures ended at $159.375, down $6.75 for the week.

HOGS: Lean hog futures may extend last week’s sharp declines on pressure from a continued slump in cash fundamentals. The CME lean hog index is down another 62 cents today (as of April 7), the seventh straight daily decline. April hogs finished last Friday $1.035 below today’s cash quote, though the lead contract’s discount is unlikely to generate much buying interest until the index shows strength. Pork cutout values ended last week at $103.16, down 44 cents for the week. Packers slaughtered an estimated 2.43 million head last week, down 4,000 from the previous week and down 24,000 from the same week in 2021. June lean hog futures ended last week at $114.575, down $5.875 for the week.