Ahead of the Open | April 21, 2023
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 8 to 15 cents lower.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: Corn and soybeans faced followthrough selling overnight, while the wheat market firmed a little amid light corrective buying. Outside markets are modestly supportive this morning, but not enough to have a major influence on the grain and soy markets. Front-month crude oil futures are around 50 cents higher and the U.S. dollar index is nearly 100 points lower.
World Weather Inc. says nearly all HRW areas of the Plains will receive some rainfall in three events over the next 10 days, though additional rainfall will be needed, especially in the driest southwestern areas.
Cold temps and rains will slow fieldwork across the Corn Belt. The Delta and Southeast will also be too wet for rapid advancement of fieldwork. This week’s rains and snow across the upper Midwest will end on Saturday, but flooding remains an issue. The next precipitation event for the upper Midwest will come late next week.
Romania will not unilaterally ban the import of Ukrainian grain and will wait for the European Commission to enforce measures to help its farmers, Agriculture Minister Petre Daea said. Romania and Ukraine will consult weekly on expected grain volumes, seeking to limit imports, Daea said.
The Hungarian Grain and Feed Association said it opposed the government’s ban on grain and oilseed imports from Ukraine, saying the restrictions “will cause significant difficulties” to feed makers and industrial users in Hungary.
CORN: May corn futures dropped below the 10-day moving average overnight. Next support is in the $6.59 to $6.57 range. Near-term resistance is at $6.68 1/2.
SOYBEANS: May soybean futures dropped below the 20- and 40-day moving averages overnight. Near-term support is at this month’s low at $14.82 1/2. Near-term resistance is layered from $14.98 1/2 to $15.02.
WHEAT: May HRW wheat futures found modest buying on the drop below the 40-day moving average overnight. The overnight low at $8.33 1/4 is near-term support. Near-term resistance is in the $8.48 3/4 to $8.50 1/2 range.
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone. Aside from the expiring April contract, futures rebounded into the close on Thursday, which should provide a little momentum today. But price action is expected to be rather light ahead of this afternoon’s Cattle on Feed Report. Traders expect the April 1 feedlot inventory to be down 5.0% from year-ago to 11.5 million head, the lowest for that date since 2017. March placements are expected to have dropped 5.2%, with marketings down 0.9%. The fall in cattle futures this week pulled cash prices down. Despite being extremely current, feedlots moved cattle at steady to $2 lower prices compared with last week, suggesting the bulk of the cattle traded were hedged. Some feedlots may hold out to see if they can get firmer prices following this afternoon’s report. Choice boxed beef prices firmed $1.07 yesterday, while Select dropped $2.72.
HOGS: Lean hog futures are expected to open with a mostly weaker tone. The market is due for a correction, but the path of least resistance is down and traders have shown no willingness to even pause the selloff. The cash index is down 16 cents to $71.41 (as of April 19), marking a new low for the year. Traders have aggressively removed premium from May hog futures and summer-month contracts this week amid the persistently weak cash index. The pork cutout value firmed $1.34 on Thursday, though movement was rather light at 287.2 loads. Despite being cheap compared to beef, packers are struggling to move enough pork to keep up with supplies.
