Ahead of the Open | April 1, 2024
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 2 to 4 cents higher.
Wheat: SRW7 to 9 cents lower; HRW 13 to 15 cents lower; HRS 8 to 10 cents lower.
GENERAL COMMENTS: Soybeans posted corrective gains overnight, while corn and wheat gave up a significant portion of Thursday’s gains. Traders will eye the initial crop progress reports of the year after the close. Outside markets were mixed overnight, as front-month crude oil futures posted modest gains and are trading near the highest mark in five months and the U.S. dollar index posted modest gains as well.
Areas of center-west and center-south Brazil received rains over the holiday weekend, improving soil moisture from Mato Grosso to Goias, northern Sao Paulo and Minas Gerais. Partial relief from dryness is expected in Mato Grosso do Sul early this week with more during the middle to latter part of next week. Rain will return to the previous flooded areas of southeastern Argentina and Uruguay later this week.
Rains and snow are falling on areas of the central U.S. this morning, bringing needed moisture to some of the driest areas. Forecasts show possible tornadoes, large hail and damaging wind gusts in parts of Texas, Oklahoma and Missouri. A generally wet pattern is expected across the central U.S. this week, with an even wetter forecast for next week.
USDA is expected to show February soybean crush at 196.7 million bu., based on a Bloomberg survey. That would be up 1.9 million bu. (1.0%) from January and 19.8 million bu. (11.2%) above February 2023. Corn-for-ethanol use is expected to total 440.5 million bu., which would be up 6.9 million bu. (1.6%) from January and 41.7 million bu. (10.5%) above last year.
CORN: May corn futures pulled back from Thursday’s gains overnight. Resistance at the 40-day moving average, currently at $4.40 1/2, continues to cap most gains. Further resistance stands at $4.45 then $4.48. Support stands at $4.36 1/4, $4.33 3/4 then $4.26 3/4.
SOYBEANS: May soybean futures posted modest gains overnight. Bulls continue to struggle against initial resistance at converged 10-day and 40-day moving average resistance at $11.95. Further buying sees resistance at $12.00, then $12.12. Meanwhile, support comes in at $11.91 1/2, $11.85 1/2 then last week’s low at $11.77.
WHEAT: May SRW futures saw profit taking overnight. Prices dipped below the 20-day moving average, currently at $5.52 1/2, marking that as initial resistance. Further buying sees resistance at $5.64. Support comes in at $5.50, uptrend line support at $5.46 3/4 then $5.43 1/2.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone as cash cattle trade rebounded to end last week. At the end of the trading week, the cash cattle average looked to post sharp losses, though prices surged nearly $3.00 after trading higher on Thursday. While the average is still likely to post losses from the prior week’s record, the robust strength seen in the cash market is likely to carry over to futures, which posted sharp losses last week. Wholesale beef prices were mixed on Friday, as Choice cutout continues to slip and Select shows relative strength. Choice was down $1.64 to $306.72 while Select was up $2.26 to $303.43, narrowing the Choice/Select spread to just $3.29.
HOGS: Lean hog futures are expected to open lower following last Thursday’s bearish Hogs & Pigs Report. The report showed nearly all categories above the pre-report estimates, as USDA estimated the March 1 hog herd up 0.6% from year-ago, with the market hog inventory 0.8% bigger while the breeding herd declined 2.1%. The winter pig crop increased 1.9%. While winter farrowings declined 2.6%, litter size jumped 4.6% to a record 11.53 head. The CME lean hog index is up another 39 cents to $84.64 as of March 27. That would put April futures $1.985 above the index, which could limit losses seen in nearby futures. Wholesale pork prices slipped 86 cents to $93.66 on Friday, led lower by a $10.02 drop in bellies.
