Ahead of the Open | January 19, 2023

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GRAIN CALLS

Corn: 1 to 3 cents lower.

Soybeans: 5 to 8 cents lower.

Wheat: 2 to 5 cents lower.


GENERAL COMMENTS: Corn, soybean and wheat futures modestly extended Wednesday’s losses during overnight trade and finished the session low-range. We anticipate a lower open this morning amid followthrough selling. Front-month crude oil futures and the U.S. dollar index are both modestly weaker and won’t much influence on grain/soy markets this morning.

USDA reported daily corn sales totaling 195,000 MT to Mexico for 2022-23.

Due to Monday’s government holiday, export sales data for the week ended Jan. 12 will be released Friday morning.

World Weather Inc. says most of Argentina will receive rain during the next 10 days to two weeks and that should help stop the decline in crop conditions and may restore some production potential for late- season crops. The rains will be too late to provide much help for early-planted crops.

World Weather says far southern Brazil’s rainfall outlook is not ideal with lighter and less frequent rain than usual expected during the next 10 days in Rio Grande do Sul. Rainfall will be less intensive compared to recent weeks and harvesting of early soybeans will advance around the precipitation.

Up to two feet of snow fell in central Nebraska Wednesday while most of the state reported 5 to 12 inches; snowfall of 2 to 8 inches occurred in neighboring areas. World Weather says the Central Plains will see a follow up storm Friday night and Saturday that will impact Kansas, Colorado and parts of Nebraska with a few showers in Oklahoma. The southwestern Plains (western Texas and western Oklahoma) are still not likely to see much precipitation of significance for a while.

India is considering measures to cool domestic wheat prices, which jumped to a record high this week as supplies dwindled, Food Secretary Sanjeev Chopra said, without providing any specifics. India banned wheat exports in May, but that has failed to stop domestic prices from rising. Meanwhile, India is not likely to allow more sugar exports, government and industry officials said, dampening speculation it would permit a second tranche of overseas shipments.
 

CORN: March corn futures held support at Wednesday’s low at $6.78. The 5- and 200-day moving averages are also around that level, providing a solid level of initial support. The 100-day moving average around $6.74 1/2 will provide additional support. Wednesday’s high at $6.88 3/4 is near-term resistance.

SOYBEANS: March soybean futures held within Wednesday’s wide range overnight. Support starts at yesterday’s low at $15.11 1/4, with additional support at the 10-day moving average around $15.06 and the 20-day average just above the psychological $15.00 mark. The 5-day moving average at $15.26 1/4 is initial resistance, with additional resistance at $15.37 1/2 and Wednesday’s high at $15.48 1/2.

WHEAT: March SRW wheat futures pivoted around yesterday’s low overnight. Support extends from the overnight low at $7.36 3/4 to last week’s low at $7.20 1/2. Near-term resistance is layered from $7.42 1/2 to yesterday’s high at $7.60 1/4.

 

LIVESTOCK CALLS 

CATTLE: Mixed.  

HOGS: Lower.

 

CATTLE: Live cattle futures are expected to open with a mixed tone this morning as traders await active cash cattle trade. Packers have been slow to establish cash cattle bids this week, though the ones that have surfaced signaled they have little intent to pay even steady money compared to last week. Feedlots aren’t in any hurry to move cattle at lower prices. That suggests the bulk of this week’s cash trade will be pushed to Friday and final volume of sales may be light. February live cattle futures finished Wednesday at $156.80, virtually the same as last week’s average cash price, signaling traders expect cash prices to be about steady. Near-term support for April live cattle futures is at Tuesday’s low of $159.45. The 5- and 10-day moving averages are near-term resistance at $160.695 and $161.00, respectively.

HOGS: Lean hog futures are expected to open under pressure after sharp losses and a low-range close on Wednesday. Fundamental pressure will continue to come from the falling cash hog index. The CME lean hog index is down another 33 cents to $73.85 (as of Jan. 17). February lean hog futures finished yesterday $3.475 above today’s cash quote. The pork cutout value firmed 45 cents yesterday but remains at a two-year low at $77.89. Packers moved 388.1 loads of pork on Wednesday, bringing this week’s volume to 1,253.5 loads. Wholesale pork prices are cheap compared to beef, even though Choice beef prices have dropped more than $6 since late last year. The Choice beef/pork cutout ratio stands at an unusually wide 3.5, which should continue to attract active retailer pork purchases. Until cash fundamentals show signs of a seasonal low, buyer interest in futures will be limited. Near-term support for April lean hog futures is last Friday’s low at $85.95. Below that, support would be in the $85.00 level down to the October low at $82.625. Initial resistance is the 5-day moving average at $87.435, with stronger resistance at the November/December double-bottom at $89.10.  

 

 

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