Ahead of the Open | March 14, 2024
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: SRW 9 to 11 cents lower; HRW 6 to 8 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Corn and wheat faced selling pressure overnight while soybeans continued to show relative strength. US producer inflation, as measured by the Producer Price Index (PPI), rose for the second time in six months, rising 0.6% month-over-month in February, above expectations of 0.3%. That did little to dissuade risk assets, as front-month crude oil futures continue to extend to the upside. The U.S. dollar index is also trading higher this morning, supported by higher interest rates, as the market contends with sticky inflation.
The Rosario Grain Exchange increased its Argentine soybean production forecast by 500,000 MT to 50 MMT after recent beneficial rains. It maintained its estimate of Argentina’s corn crop at 57 MMT but warned of fields being impacted by spiroplasma (corn stunt disease).
Chinese importers have cancelled or postponed about 1 MMT of Australian wheat cargoes, trade sources with direct knowledge of the deals told Reuters. Some of that total was washed out, while other cargoes were delayed from first quarter shipment to delivery later this year. USDA reported daily sales cancellations of U.S. SRW wheat by China totaling 504,000 MT between late last week and Monday. French traders cautioned there were no clear signs of French wheat being cancelled, though they said it was possible Chinese buyers might wash out some cargoes given lower prices than when they were purchased.
This morning, USDA reported daily sales of 100,000 MT of corn for delivery to Mexico during the 2023-24 marketing year.
Export sales for the week ended Mar. 7:
Corn: Net sales of 1.283 MMT for 2023-24, up 16% from the previous week and 19% from the four-week average. Increases came primarily for Japan, Mexico, Taiwan and China. Sales came in the upper end of expectations ranging from 800,000 MT to 1.4 MMT.
Soybeans: Net sales of 376,000 MT for 2023-24, down 39% from the previous week but up 55% from the four-week average. Increases came primarily for Germany and China. Sales were at the lower end of expectations from 250,000 to 800,000 MT.
Wheat: Net sales of 83,800 MT for 2023-24, a marketing-year low – down 69% from the previous week and 71% from the four-week average. Increases primarily came for Mexico and the Philippines, though were offset by reductions to unknown destinations and Chine. Traders expected net sales between -200,000 to 550,000 MT.
CORN: May corn futures continue to trade sideways under the 40-day moving average, which stands as stiff resistance at $4.43. Further buying eyes this week’s high of $4.45, then $4.50 1/2. Support comes in at $4.35 3/4 then the $4.40 mark.
SOYBEANS: May soybean futures continue to show impressive strength. Prices poked above downward trendline resistance overnight, which will remain an important pivot at $11.95 1/2. Resistance stands at the psychological $12.00 mark, $12.08 1/4, then $12.18 1/4. Meanwhile, support stands at $11.95 1/2, $11.84, then $11.76 1/2.
WHEAT: May SRW futures saw sustained selling pressure overnight. Bulls are seeking to overcome resistance at the 10-day moving average, currently at $5.47, which capped gains early this week. Further resistance stands at $5.53 1/4, then $5.58 3/4. Meanwhile, continued selling sees support at $5.28 then
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open higher on a continuation of Wednesday’s strength. April futures surged above prior resistance, marking a fresh for-the-move high and for-the-move high close. That ends the three week long streak of struggling to mark higher highs and indicates that strength is likely to persist. Only light cash cattle trade has taken place in the negotiated market so far this week at slightly weaker prices. Packers continue to drag their feet on cash negotiations, while feedlots are positioned to wait on steady/firmer prices. Estimated week-to-date slaughter totaled 351,000 head through Wednesday, 11,000 below week-ago and 23,151 head behind last year’s pace. Slaughter will be down from last week’s light 583,000 head tally. Wholesale beef prices were mixed Wednesday, as Choice cutout slipped 77 cents to $309.82 and Select rose $1.44 to $301.04. USDA reported net beef sales of 11,200 MT for 2024, a marketing-year low – down 20% from the previous week and 19% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone as seasonal strength continues in the CME lean hog index. April futures opened lower Wednesday and saw sustained selling throughout the morning, though continued strength in the cash market spurred a reversal, with the contract ending the day nearer session highs. The CME lean hog index is up another 41 cents to $82.02 (as of Mar. 12), marking a fresh for-the-move high. Futures continue to be hyper focused on the cash market, with persistent strength encouraging them to start rebuilding premiums in the April contract. It now stands $2.855 above the most recent quote for the index, though that is still below the seasonal average advance of $3.75 in the index from now until April 16, when the contract is cash settled. Wholesale pork prices slipped 63 cents to $91.84 yesterday, led by weakness in loins. USDA reported net pork sales of 24,900 MT for 2024, down 32% from the previous week and 24% from the four-week average.
