Ahead of the Open | February 14, 2024
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: Winter wheat 8 to 12 cents lower; spring wheat 6 to 10 cents lower.
GENERAL COMMENTS: Grain and soy futures faced pressure overnight amid technical-based selling and a lack of supportive news. Outside markets are mildly supportive, with crude oil firmer and the U.S. dollar index weaker, though neither market should be a major influence on grains this morning. Key this morning will be whether fresh selling develops or corrective buying shows up under the markets.
World Weather Inc. says Rio Grande do Sul, Brazil, and much of Argentina will not see much significant moisture for the next week to 10 days, although a few west-central and northern Argentina locations may get infrequent shower activity. The remainder of Brazil will receive sufficient rain to maintain moisture abundance. Northern Brazil will see drier biased weather for another couple of days before rain resumes.
SovEcon raised its 2024 Russian wheat crop estimate 1.4 MMT to 93.6 MMT.
An official with shipping giant Maersk told CNBC the company doesn’t expect Red sea vessel transits to resume “anytime soon.” Meanwhile, Egypt’s Suez Canal will coordinate with clients to find ways to reduce the effects of the Red Sea crisis on trade, Canal Authority Chairman Osama Rabie told the CEO of shipping giant MSC. Attacks by Yemen’s Iran-aligned Houthis on vessels in the Red Sea continue to disrupt global shipping and force firms to take longer, more costly routes. More than 7 MMT of grain shipments have reportedly been rerouted due to the attacks.
Ukraine has exported almost 2.4 MMT of grain so far this month, lower than the 2.7 MMT shipped over the same period in 2023, ag ministry data showed. Exports since the beginning of the 2023-24 marketing year on July 1 totaled 26.3 MMT, down from 29.7 MMT during the same period last year. That included 14.4 MMT of corn, 10.1 MMT of wheat and 1.5 MMT of barley.
Winter weather conditions have been mostly favorable for Ukrainian winter crops, APK-Inform consultancy quoted state meteorologists as saying. The forecaster said fields in most of the country’s regions had sufficient soil moisture and only some areas in the southern Kherson and Odesa regions had levels that were “less than the average long-term values.”
CORN: March corn futures posted a double-bottom overnight at the contract low of $4.27 3/4. Below that, support comes in the $4.25 to $4.20 range. Overhead resistance is layered in the $4.30 1/2 to $4.35 1/2 range. While prices haven’t faced heavy pressure, selling has been persistent, with buyer interest limited.
SOYBEANS: March soybean futures posted a for-the-move low at $11.75 3/4 overnight. Next support extends from $11.75 1/4 to the May 2023 contract low at $11.45 1/4. Near-term resistance is layered from $11.87 to $12.05 1/2.
WHEAT: March SRW futures spiked initial support at $5.83 3/4 during overnight trade. The overnight low at $5.77 1/2 is near-term support, followed by the January low at $5.73 1/4. Near-term resistance is layered from $5.93 to $5.97.
CATTLE: Choppy/lower.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone after further corrective losses and a lower range close on Tuesday. While traders aren’t expecting cash cattle prices to weaken this week, they have wavered on hopes for higher prices as packers slow slaughter runs to manage supplies. Cattle slaughter through the first two days of the week was estimated at 240,000 head, 10,000 behind last week and 8,835 lower than last year’s pace. Estimates for this week’s slaughter are just over 600,000 head as packers reduce runs in an attempt to manage supplies instead having to actively bid for cattle for a fifth straight week. Wholesale beef prices fell $1.81 for Choice and $1.72 for Select on Tuesday, while movement totaled 108 loads.
HOGS: Lean hog futures are expected to open with a mixed tone in what’s likely to be quiet trade ahead of the February contract’s expiration. The CME lean hog index is up another 41 cents to $74.11 as of Feb. 12, the highest since Nov. 20, though still roughly $3.00 below last year at this time. February lean hog futures, which are cash-settled on Friday, finished Tuesday 11.5 cents above today’s cash quote. April hogs held nearly a $7.00 premium to the cash index. Wholesale pork prices fell $1.38 on Tuesday, led lower by a $4.60 loss in bellies and a $2.31 drop in hams. The upper-$80.00 range continues to act as a ceiling for wholesale pork prices.
