Ahead of the Open | March 21, 2023
GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 5 to 10 cents higher.
Wheat: SRW 2 to 4 cents higher; HRW and HRS 5 to 8 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat firmed late in the overnight session, finishing near their session highs. That should fuel followthrough buying during the start of daytime trade. Outside markets will add support, with front-month crude oil more than $1 higher and the U.S. dollar index down around 250 points this morning.
USDA reported daily corn export sales of 136,000 MT to China for 2022-23. This follows daily corn sales totaling 2.111 MMT to China for the 2022-23 marketing year last week.
South American crop consultant Dr. Michael Cordonnier cut another 2 MMT off his Argentine soybean crop forecast, lowering it to 26 MMT. He lopped another 1 MMT off his Argentine corn crop estimate, dropping it to 36 MMT. Cordonnier says if this week’s rains across central Argentina prove disappointing, his Argentine crop pegs may be lowered again. Cordonnier kept his Brazilian crop estimates at 151 MMT for soybeans and 121 MMT for corn.
World Weather Inc. says Argentina’s rain event coming up over the next several days will provide some much-needed relief from months of drought, although more moisture will be needed to end the drought. Brazil’s crop areas from southern Mato Grosso do Sul and Parana to Minas Gerais will continue to experience improving weather with an opportunity for more harvesting of soybeans and planting of safrinha corn.
Russia supports the New Land Grain Corridor project intended to supply grain to the Chinese market, Russian Prime Minister Mikhail Mishustin said. He said, like China, Russia “gives paramount attention to ensuring food security” at a meeting with Chinese President Xi Jinping on Tuesday. Russian President Vladimir Putin met with Xi on Monday.
CORN: May corn futures found buyer interest on the dip below the 5-day moving average overnight and pushed above the 20-day average. Near-term resistance is starts at last week’s high of $6.38 3/4 and extends to previous support at $6.48 1/4. Near-term support is the 10-day moving average near $6.25.
SOYBEANS: May soybean futures extended Monday’s corrective gains late in the overnight session. Near-term support is at the 10-day moving average near $14.95 1/2, followed by the psychological $15.00 mark and the 20-day average at $15.04 3/4. Initial support is at the 5-day moving average at $14.87 1/4. Tuesday’s low at $14.62 is key support.
WHEAT: May SRW wheat futures bounced from the 10-day moving average near $6.92 1/2 overnight. That level will serve as initial support. Near-term resistance starts at the 5-day moving average at $7.02 3/4, followed by the 20-day average at $7.04 1/2.
CATTLE: Choppy/lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open with a mixed to mostly weaker tone following a poor close on Monday. The cash cattle market dropped $1.23 last week and wholesale beef prices have been declining for the past two weeks, but underlying fundamentals remain bullish. Still, traders have been extremely cautious toward the long side of the market, with April through December live cattle futures trading below last week’s average cash price. Choice boxed beef prices dropped $2.33 on Monday, while Select firmed $1.50. Movement totaled 107 loads. Given the macroeconomic uncertainty, it’s likely going to take an uptick in wholesale beef prices and movement, along with firmer cash trade to restore buyer interest in futures.
HOGS: Lean hog futures are expected to open under pressure on followthrough selling after a further technical breakdown on Monday. While the market is short-term oversold and due for a correction, technicals are bearish and the path of least resistance is down. The CME lean hog index is down 46 cents to $79.55 (as of March 17), ending an extended string of cash market strength. But April lean hog futures finished Monday $1.775 below today’s cash quote, suggesting the downside should be limited. The pork cutout value firmed 69 cents on Monday, while packers moved 318.1 loads on the day.
