Ahead of the Open | April 27, 2023
GRAIN CALLS
Corn: 5 to 10 cents lower.
Soybeans: 6 to 10 cents lower.
Wheat: 10 to 15 cents lower.
GENERAL COMMENTS: Grain and soy futures faced active followthrough selling overnight. With technicals eroding and a lack of supportive news, bears strongly have momentum on their side. Weekly export sales data offered no signs prices are “cheap enough” and USDA reported daily sales cancellations of 233,000 MT of corn to China for 2022-23.
Dry HRW wheat areas of the Southern Plains have received the best rains since last summer. More rains are expected today and Friday.
Seasonably cool temps are expected across the Northern Plains and upper Midwest over the next two weeks, keeping fieldwork slow in these areas.
The southern and west-central Corn Belt will receive lighter-than-usual precipitation over the next two weeks with cool weather in the first week and a return to more normal temperatures in the second week, according to World Weather Inc.
Russia continues to talk tough regarding the Black Sea grain deal, continuing its threat to not extend the initiative past the May 18 deadline. But price action in the corn and wheat markets clearly signals traders aren’t concerned.
Export sales for the week ended April 20:
Corn: Net sales of 400,000 MT for 2022-23 increased 28% from the previous week but were 49% below the four-week average. Old-crop sales were near the middle of expectations ranging from 100,000 to 800,000 MT. USDA reported net sales reductions of 64,300 MT to China and 54,700 MT to unknown destinations for the week.
Soybeans: Net sales of 311,300 MT for 2022-23 more than tripled the previous week’s total and rose 38% from the four-week average. Old-crop sales were in the middle of traders’ expectations ranging from 75,000 to 500,000 MT. China purchased only 5,300 MT of U.S. old-crop soybeans during the week and took shipment of 140,600 MT.
Wheat: Net sales of 155,700 MT for 2022-23, down 40% from the previous week and 7% from the four-week average. Sales were within the range of pre-report estimates from 75,000 to 400,000 MT for old-crop. Net sales of 202,100 MT for 2023-24 were near the top of the expected range from 0 to 225,000 MT.
CORN: July corn futures continued to erode technically, falling below the March low to the lowest level since July 2022. Next support is in the $5.85 to $5.74 area. The psychological $6.00 mark is initial resistance, with additional near-term resistance layered to previous support at $6.15 3/4.
SOYBEANS: July soybean futures posted a new low for the week overnight, falling to the lowest level in a month. Near-term support extends from $14.01 1/4 to the March low at $13.83 3/4. Near-term resistance is layered from $14.11 1/4 to the 5-day moving average around $14.24 1/2.
WHEAT: July HRW wheat futures plunged to a seven-week low overnight. Next support is the March low at $7.63 3/4. Near-term resistance starts at previous support at $7.80 3/4.
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone after a high-range close on Wednesday. But buyer interest is likely to be restricted as traders wait on active cash cattle trade to develop. Opinions remain split on whether cash prices will be higher or lower compared to last week. Packers remained slow to establish cash cattle bids, delaying trade for the week. With packers buying only 74,000 head of cattle last week and market-ready supplies remaining tight, they don’t have much leverage in cash negotiations. But cash sources signal there’s talk some plants may slow production instead of actively raising cash bids. Choice boxed beef firmed $1.61 on Wednesday, while Select rose 32 cents. Movement slowed to 97 loads.
USDA reported net beef sales of 9,500 MT for 2023, down 50% from the previous week and 79% below the four-week average.
HOGS: Lean hog futures are expected to open higher after a strong finish on Wednesday. While the market is now flashing signs of a low technically, buyer interest in futures may be limited until the cash market shows sustained strength. The CME lean hog index is up 11 cents to $71.31 (as of April 25), marking consecutive days with modest gains. That’s the first back-to-back days with gains in six weeks, right before the cash market plunged. The pork cutout value slipped 4 cents yesterday and movement slowed to 272.8 loads. Despite high beef prices, packers are struggling to move product, which is limiting any advances in the cutout value.
USDA reported net pork sales of 54,000 MT for 2023, a marketing-year high and 47% above the four-week average. Mexico purchased 32,400 MT of U.S. pork for the week.
