Ahead of the Open | February 22, 2024
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 2 to 4 cents lower.
Wheat: SRW 5 to 7 cents higher; HRW 7 to 10 cents higher; HRS 5 to 8 cents higher.
GENERAL COMMENTS: Wheat showed relative strength overnight while soybeans led weakness, leaving corn caught between the two. Outside markets were mixed overnight as equity futures surged to record highs, front-month crude oil futures posted modest losses from recent highs and the U.S. dollar index traded near unchanged as interest rates continue to trade near recent highs.
Houthi militants and their Iranian backers are preparing for a lengthy confrontation with the U.S. and allies around the Red Sea regardless of how the Israel/Hamas war plays out. The Yemen-based group is shoring up military and defense capabilities to continue attacking ships around the vital waterway, Bloomberg reports, citing people with knowledge of the situation. Steps include fortifying mountain hideouts for more secure and effective missile launches and testing unmanned vessels above and below water.
Polish Prime Minister Donald Tusk said there was no need to meet with Ukrainian President Volodymyr Zelenskyy at the border to defuse a farmer blockade that has disrupted grain shipments from Ukraine. Tusk pledged at a Warsaw briefing Thursday to introduce a special regime on the frontier to ensure safe passage for humanitarian and military aid for Kyiv despite the protests. Tusk said the cabinets of the two countries had agreed to meet in the Polish capital on March 28.
Consumer inflation in the euro zone slipped to 2.8% above year-ago in January, in line with the preliminary estimate and down from a 2.9% rise the previous month. Core inflation, excluding food and energy prices, rose 3.6% annually. An even narrower measure excluding alcohol and tobacco increased 3.3% from year-ago.
Due to Monday’s government holiday, USDA’s export sales data for the week ended Feb. 15 will be released Friday morning.
USDA reported daily sales of 126,000 MT of sorghum for delivery to China during the 2023-24 marketing year.
CORN: March corn futures saw moderate corrective gains overnight after scoring a fresh contract low. Bulls are eyeing resistance at $4.15, $4.16 1/2, then the 10-day moving average at $4.21 1/2. Meanwhile, support stands at $4.11, the contract low of $4.07 1/2, with significant backing from $4.00.
SOYBEANS: March soybean futures continue to trade near recent lows. Bulls are targeting initial resistance at $11.62 1/4, $11.68 1/4, then the 10-day moving average at $11.75 1/4, which capped gains earlier this week. Support comes in at $11.57 1/2, then the psychological $11.50 mark.
WHEAT: March SRW futures continue to show relative strength. Bulls are working on their third-consecutive daily gain, targeting resistance at $5.89 1/2 then the 40-day moving average at $5.95 1/2. Support stands at $5.84 3/4, $5.79 3/4, then $5.74.
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though technical resistance is likely to continue to dampen bulls’ momentum after the open. Tight supplies and negative packer margins have reduced estimated slaughter to 349,000 head through the first three days of the week, 14,000 head below last week and 4,247 head below last year. Cash sources expect the weekly tally to fall below 600,000 head, with some as low as 590,000. That also means packers won’t likely be very active with cash cattle bids after buying a lot of cattle the past two weeks. And feedlots appear in no hurry to move cattle at lower prices with Friday afternoon’s Cattle on Feed Report expected to be bullish. Wholesale beef prices were mixed on Wednesday as Choice cutout rose 43 cents to $297.80 and Select fell $3.36 to $284.46. Movement slipped to 105 loads, light for midweek.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, though technical resistance could limit gains after the open. Despite prices closing higher each of the last five sessions, April futures have settled below the open for three of those days. Chart-based selling and futures’ premiums to the CME lean hog index have encouraged sellers, though buyers continue to underpin the market. The cash index is up another $1.17 to $77.97 (as of Feb. 20), marking back-to-back days of $1.00-plus gains. The cash index is outpacing futures, with the premium in the April contract down to $8.005 as of Wednesday’s close. Wholesale pork prices dropped $2.27 to $90.17 on Wednesday, once again led lower by weakness in bellies. Movement slipped to 254.6 loads.
