Ahead of the Open | March 28, 2024
Grain and livestock markets are closed for Good Friday, so there will be no Pro Farmer updates on March 29. Government offices are open, though there are no USDA reports. Pro Farmer wishes everyone a blessed Easter!
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 3 to 5 cents lower.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat traded in tight ranges overnight, with grains showing relative strength into the break. Outside markets were mixed overnight, as front-month crude oil futures continue to work higher and the U.S. dollar index posted modest gains. The most recent GDP forecast showed the U.S. economy as expanding 3.4% in Q4 2023, slightly higher than 3.2% previously reported, according to the final estimate from the Bureau of Economic Analysis.
USDA will release its Prospective Plantings and Quarterly Grain Stocks Reports at 11:00 a.m. CT. Much of the pre-report attention is on planting intentions, but quarterly stocks have proven to be strongly market-moving, especially for corn. For planting intentions, analysts expect: corn at 91.776 million acres; soybeans at 86.530 million acres; all wheat at 47.330 million acres, including 34.870 million acres of winter wheat, 10.891 million acres of other spring wheat and 1.652 million acres of durum; and cotton at 10.906 million acres. Analysts expect March 1 stocks of 8.427 billion bu. for corn, 1.828 billion bu. for soybeans and 1.044 billion bu. for wheat.
Federal officials told Maryland lawmakers that replacing the Francis Scott Key Bridge in Baltimore would cost at least $2 billion, according to Bloomberg, citing a person familiar with the matter. President Joe Biden said on Tuesday the federal government should pay for the rebuild and he’d work with Congress on it. Debris from the collapsed bridge is blocking the shipping channel connecting the port to the Chesapeake Bay and the Atlantic Ocean. Remains of the bridge must be cleared before the port can restart operations, which experts say could take months. There is a difference of opinion as to whether shipping through a cleared channel will be halted during reconstruction of the bridge. Some predict intermittent stoppages. But transportation analyst Ken Ericksen of Polaris Analytics and Consulting says: “There may be limited transits or restrictions during certain hours, but one stipulation is that trade cannot be disrupted. All Maryland elected officials and DOT Secretary Pete Buttigieg have essentially said navigation is too important not only for the Baltimore area but for the United States.”
Export sales for the week ended Mar. 21:
Corn: Net sales of 1.207 MMT for 2023-24, up 2% from the previous week and 4% from the four-week average. Increases came primarily for Mexico and Canada. Sales came in the upper end of expectations ranging from 800,000 MT and 1.3 MMT.
Soybeans: Net sales of 263,900 MT for 2023-24, down 47% from the previous week and 26% from the four-week average. Increases came primarily for Germany and Mexico. China switched sales amounting to 321,000 MT from unknown destinations. Sales were below expectations ranging from 300,000 to 700,000 MT.
Wheat: Net sales of 339,600 MT for 2023-24, up noticeably from the previous week and four-week average. Increases came primarily for Taiwan, South Korea and Japan. Sales came in above expectations of -100,000 to 300,000 MT.
CORN: May corn futures traded in a tight range overnight. Bulls are seeking to overcome resistance at $4.30, $4.33 3/4 then the 40-day moving average at $4.40 on report driven strength. Further selling finds support at $4.25 then $4.20, though there is little additional backing until $4.13 1/2.
SOYBEANS: May soybean futures saw modest losses overnight. Bulls are seeking to reclaim resistance at the 40-day moving average, currently at $11.96 1/4. Further buying targets resistance at $12.12 1/2. Support stands at $11.85 1/2, $11.81 then $11.68 1/2.
WHEAT: May SRW futures posted modest corrective gains overnight. Bulls are seeking to overcome resistance at $5.51 1/2. Additional resistance lies at $5.59, then the 40-day moving average at $5.64. Bulls are seeking to hold support at $5.43 1/2, $5.40 then $5.28 1/2 on a reversal lower.
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, as the near-term trend has become bearish and cash fundamentals continue to weaken. While sales have been light, additional negotiations took place in the cash market, bringing the average to $185.47 so far this week, sharply lower than last week’s record. Continued selling pressure in futures and a potential top in wholesale beef prices are likely to increase the pessimism seen in the cash market. Choice cutout fell $2.51 to $308.58 while Select slipped $1.83 to $298.43 on Wednesday. Choice beef has declined $5.15 since March 21, signaling a short-term top is in place. USDA reported net beef sales of 12,700 MT for 2024, up 15% from the previous week and 4% from the four-week average. U.S. origin beef continues to lose market share in the export market, as the shrinking cattle herd has made prices uncompetitive on the world market.
HOGS: Lean hog futures are expected to open mostly higher on continued seasonal strength, though technical selling could limit gains after the open. After falling modestly late last week, the CME lean hog index is up another 56 cents to $84.25 as of March 26, the biggest daily gain since Feb. 21 and the highest level since Oct. 3, 2023. Meanwhile, after jumping to for-the-move highs early this week, pork cutout has fallen for two consecutive days, dropping $1.27 on Wednesday to $94.06 in the largest daily decline since March 5. All cuts except bellies posted losses on the day. Despite yesterday’s drop, pork cutout continues to firm seasonally. USDA reported net pork sales of 55,300 MT for 2024 – a marketing-year high, up 64% from the previous week and 74% from the four-week average.
