Ahead of the Open | March 20, 2024
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 6 to 8 cents higher.
Wheat: Winter wheat 6 to 8 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Soybeans led the way higher, wheat saw weakness and corn was caught in the middle overnight. Each traded contrary to yesterday's price action. Outside markets were not supportive overnight, as front-month crude oil futures saw profit taking from recent highs and the U.S. dollar index continues to work higher. The market will be closely watching this afternoon’s interest rate decision from the Federal Reserve and accompanying press conference with Fed Chairman Jerome Powell.
China’s soybean imports from Brazil totaled 6.96 MMT during the first two months of this year, a 211% surge from year-ago. Combined January and February soybean arrivals from the U.S. fell to 4.96 MMT, down 48.9% from the same period last year. China imported 4.1 MMT of corn from Brazil during the first two months of this year, two-thirds of its total imports and a 178% jump from the same period last year. Corn imports from the U.S. of 766,989 MT fell 67% from the first two months of last year.
Russia will adjust its grain export duties but not cancel them, according to Russian Agriculture Minister Dmitry Patrushev. He noted duties were adjusted at the start of 2023-24 and would be again for the new-crop marketing year, but did not give specific figures. Russian farmers have criticized grain export taxes amid falling international prices.
European grain trading association Coceral cut its forecast for this year’s soft wheat production in the European Union, including the UK, to 134.1 MMT from its projection of 139.5 MMT in December. Coceral raised its estimate for 2024 EU + UK barley production by 2.6 MMT to 61.2 MMT and increased its corn production forecast by 600,000 MT to 64.3 MMT.
USDA reported daily export sales of 120,000 MT of soybeans for delivery to unknown destinations during the 2024-25 marketing year.
CORN: May corn futures faced selling pressure overnight. Prices have been caught between 40-day moving average resistance and 20-day moving average support, currently at $4.41 3/4 and $4.36, respectively. Additional resistance stands at $4.45, while further selling eyes support at $4.33.
SOYBEANS: May soybean futures reversed higher overnight. Resistance stands at the 40-day moving average at $11.94 1/2, backed by the psychological $12.00 mark, then last week’s high of $12.17 1/2. Support comes in at $11.85, $11.81 then $11.75 on a reversal lower.
WHEAT: May SRW futures reversed most of Tuesday’s gains overnight. Initial resistance stands at the psychological $4.40 mark. Prices rejected off the 20-day moving average, which will serve resistance at $5.53 1/4. Support stands at $5.42 1/2, backed by $5.37 3/4 then $5.28 1/2.
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, as technical resistance continues to limit the upside. Despite a brief poke above $188.75 last week, that mark has capped nearly all the upside in April futures since it was initially tested in mid-February. While that stands at stout resistance, rising cash prices will likely continue to underpin the market, which could limit losses after the open. Cash trade has yet to take place this week, as is the norm in weeks featuring USDA’s Cattle on Feed Report, which is released Friday. Wholesale beef prices ended Tuesday mixed, as Choice slipped 11 cents to $313.22 and Select rose 13 cents to $303.18. Movement improved to 138 loads, indicating strong retailer demand for beef ahead of the grilling season.
HOGS: Lean hog futures are expected to open with a mostly weaker tone on a continuation of Tuesday’s weakness. Traders are actively keeping the premium April futures hold to the index in check. The CME lean hog index is up another 28 cents to $82.82 today (as of Mar. 18). April lean hog futures dropped on Tuesday despite continued strength in the cash index, the lead contract finished yesterday at a $3.005 premium to today’s cash index quote. The spread reflects a slightly bigger-than-average rise in the index over the next month. Wholesale pork prices proved firmer on Tuesday, as a $3.89 rise in ribs helped support cutout. Movement continues to weaken modestly, reflecting lighter slaughter the last couple of weeks.
