Ahead of the Open | April 4, 2024
GRAIN CALLS
Corn: 1 to 2 cents lower.
Soybeans: 4 to 8 cents lower.
Wheat: SRW steady to 2 cents lower; HRW 1 to 2 cents higher; HRS 2 to 5 cents higher.
GENERAL COMMENTS: Corn and soybean futures mildly favored the upside earlier this morning but buyer interest faded late in the overnight session and prices turned weaker. SRW wheat futures followed corn and soybeans lower into the end of the overnight session, while HRW and HRS futures held onto gains. We expect similar price action on the open this morning. The U.S. dollar index is down around 200 points, while front-month crude oil futures are modestly weaker.
HRW wheat areas on the Plains are expected to be mostly dry over the next 10 days, according to World Weather Inc. That’s not a concern for now as the drought footprint has receded in the region, though World Weather notes a high pressure ridge could develop over the central U.S. in the May-June timeframe. Heavy rains are forecast for southern SRW areas over the next week to 10 days.
In South America, west-central and southern Argentina will be mostly dry, while some rains are possible in eastern areas of the country. Safrinha corn areas of Brazil will be dry into next Monday. There will be some rain opportunities for these area later next week.
Russian grain trader Aston denied a Reuters report that Russian authorities halted some of its grain shipments due to quality issues. Aston said its export program was being implemented in line with plans agreed with partners, and there were no changes to the schedule of product shipments from sea and river ports. “The requirements of Rosselkhoznadzor and quarantine requirements of importing countries are fully observed,” Aston said.
USDA reported daily soybean sales of 152,404 MT to Mexico for 2023-24.
Export sales for the week ended March 28:
Corn: Net sales of 948,000 MT for 2023-24, down 21% from both the previous week and the four-week average. Net sales of 11,400 MT for 2024-25. Traders expected 800,000 MT to 1.4 MMT for 2023-24 and 0 to 200,000 MT for 2024-25. Exports of 1.641 MMT were a marketing-year high.
Soybeans: Net sales of 194,200 MT for 2023-24, down 26% from the previous week and 54% from the four-week average. China purchased 153,900 MT of soybeans during the week. Traders expected 200,000 to 6000 MT for 2023-24.
Wheat: Net sales of 16,100 MT for 2023-24, down 95% from the previous week and 89% from the four-week average. China purchased 74,800 MT of old-crop wheat. Net sales of 262,000 MT for 2024-25. Traders expected (100,000) to 400,000 MT for 2023-24 and 75,000 to 250,000 MT for 2024-25
CORN: May corn futures are holding in a short-term consolidation range from $4.24 1/2 to $4.48. Near-term resistance is layered from $4.33 1/2 to $4.38, where the short- and intermediate moving averages are located. Near-term support extends from $4.30 to last week’s low at $4.24 1/2.
SOYBEANS: May soybean futures showed signs of halting the pullback from the March high during Wednesday’s session. Near-term support starts at the 40-day moving average at $11.78 1/4 and extends to yesterday’s low at $11.68 1/2. Near-term resistance is layered from the 50-day moving average at $11.86 1/4 to the 10-day average just above $11.92.
WHEAT: May SRW futures continue to consolidate in a band from $5.38 1/2 to $5.68 1/2, while maintaining a modest uptrend from the March lows. The contract is holding above the short-term moving averages, while the intermediate averages stand as overhead resistance.
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open mostly lower amid weak technicals and cash fundamentals. But seller interest could be limited if bulls continue to defend support at this week’s lows. There has been limited followthrough selling interest below Monday’s lows. There has been limited cash cattle traded this week, though the animals that changed hands were at lower prices. Wholesale beef prices fell further Wednesday with Choice down another $2.86 and Select $2.07 lower. USDA reported weekly beef export sales of 18,700 MT for 2024, up 48% from the previous week and 53% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on support from seasonally rising cash prices. But with futures short-term overbought, it wouldn’t surprise us to see some profit-taking surface. The CME lean hog index is up another 23 cents to $85.15 as of April 2. April lean hog futures ended Wednesday at a $2.825 premium to today’s cash quote. The pork cutout value fell $2.30 on Wednesday as all cuts posted sizable declines. While movement improved to 274.6 loads, retailer buying has been tepid, suggesting they are being selective buyers with the cutout in the mid- to upper-$90.00 range. USDA reported weekly pork export sales of 28,700 MT for 2024, down 48% from the previous week and 24% from the four-week average.
