Ahead of the Open | January 19, 2024

Ahead of the Open
Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 2 to 4 cents higher.

Soybeans: 10 to 13 cents higher.

Wheat: Winter wheat 6 to 8 cents higher; HRS 8 to 10 cents higher.

GENERAL COMMENTS: Corn, soybeans and wheat each saw continued corrective gains overnight, with corn and wheat both supported near the break by export sales coming in above expectations. Soybeans are likely to be supported by this morning's daily sale, as USDA reported sales of 297,000 MT of soybeans for delivery to China during the 2023-24 marketing year. Downtrodden prices spurring fresh export demand could be the demand boost the market has been looking for. Outside markets were quiet overnight as front-month crude oil futures traded near unchanged and the U.S. dollar index saw modest weakness as it continues to consolidate near recent highs.

A bill to avert a partial U.S. government shutdown secured enough votes to pass in the House. The Senate earlier Thursday approved the measure. Legislators now have until March 1 to fund some agencies, including USDA, and March 8 for the others.

The Russian Kremlin said there was no prospect of reviving the Black Sea grain deal and that alternative routes for shipping Ukrainian grain carried huge risks. These comments came after Ukraine’s ambassador to Turkey said on Thursday “certain negotiations” were underway regarding the UN-brokered Black Sea grain export initiative.

Export sales for the week ended Jan. 11:

Corn: Net sales of 1.251 MMT for 2023-24, up noticeably from the previous week and 61% from the four-week average. Increases came primarily for Mexico and Colombia. Sales came in above expectations of 500,000 MT to 1.2 MMT.

Soybeans: Net sales of 781,300 MT for 2023-24, more than double the previous week but down 6% from the four-week average. Increases came primarily for China and Germany. Traders expected sales between 400,000 to 900,000 MT.

Wheat: Net sales of 707,600 MT for 2023-24, which were more than the last four weeks combined. Increases came primarily for the Philippines, unknown destinations and South Korea. Sales came in above expectations of 150,000 and 500,000 MT.

 

CORN: March corn futures saw continued profit taking overnight. Bulls are seeking to reclaim prior support, now resistance at $4.47 before tackling the psychological $4.50 mark, further backed by the 10-day moving average at $4.51 1/4. Meanwhile, support stands at $4.44, $4.42 1/4, then the contract low at $4.36 3/4.

SOYBEANS: March soybean futures are near the upper end of the recent downward channel. A daily close above $12.25 would signal a technical breakout with bulls targeting $12.34 3/4 then the psychological $12.50 mark. Another downward turn lower would target support at $12.13 1/2 then $12.01.

WHEAT: March SRW futures saw continued corrective gains overnight. Bulls are seeking a daily close above resistance at $5.95 3/4 before tackling psychological resistance at $6.00 then $6.02 1/4. Support stands at $5.85 1/2, $5.82, then Thursday’s low at $5.73 1/4.

 

LIVESTOCK CALLS

CATTLE: Higher.

HOGS: Choppy/higher.

CATTLE: Live cattle futures and feeders are expected to open with a firmer tone on continuation of Thursday’s strength, which sent nearby contracts to the highest level since Nov. 22. Cash cattle trade has seen minimal volume ahead of today’s USDA Cattle on Feed Report. Reports of asking prices at $174.00 and $175.00 were met with limited packers bids as margins remain in the red despite the recent surge in wholesale beef prices. Limited cash trade and low volume futures trade ahead of the report this afternoon could limit buying in futures, as they have quickly reached “par” with cash cattle asking prices. Wholesale beef prices were mixed on Thursday, breaking the nine-day string of gains. Choice cutout fell $2.16 to $296.29, while Select showed relative strength, rising 74 cents to $283.76. USDA reported net beef sales of 21,400 MT for 2024, the largest weekly total since July.

HOGS: Lean hog futures are expected to open with a modestly firmer tone, though prices are likely to continue to see moderate volatility in the recent consolidation pattern. February futures continue to form a bullish pennant pattern on the daily bar chart, as Thursday’s failed gap higher was unable to break out. The CME lean hog index is up another 53 cents to $67.87 (as of Jan. 17), marking the seventh gain in the last eight days. February lean hog futures finished Thursday at a $3.23 premium to today’s cash quote, so futures are likely to be supported by rising cash prices. Pork cutout rose 77 cents on Thursday to $88.73, marking the highest price since Nov. 27, though down from the midsession quote. USDA reported net pork sales of 33,400 MT for 2024, up 44% from a week ago.

 

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