GRAIN CALLS
Corn: 2 to 5 cents lower.
Soybeans: 3 cents lower to 3 cents higher.
Wheat: Winter wheat steady to 2 cents higher; spring wheat 4 to 6 cents higher.
GENERAL COMMENTS: Wheat futures were generally firmer overnight but the winter wheat markets finished on or near session lows, suggesting buyer interest will be limited this morning. Corn faded to mild losses and soybeans traded mixed amid bull spreading. Outside markets are mixed and won’t likely provide strong direction this morning. Front-month crude oil futures are modestly lower, while the U.S. dollar index is down around 200 points.
Some frost and freeze damage may have occurred in Nebraska, northern Kansas and northeastern Colorado Sunday morning when temperatures fell to the upper teens and lower 20s, according to World Weather Inc. Impacts are expected to be limited, but it will take several days to assess any damage. Meanwhile, needed rains are forecast for HRW areas of the Plains this week, though limited amounts are expected in the driest southwestern areas of the region. Temperatures will trend cooler than normal across the Corn Belt and Plains for the next 10 days.
Market attention is on the Black Sea grain deal, especially rhetoric coming from Russia. Last Friday, Moscow said it will not approve any new vessels unless operators guarantee the transits will be done by May 18. Russia has repeatedly said it will not extend the Black Sea grain deal beyond May 18 unless Western restrictions blocking its agricultural and fertilizer exports and other matters are addressed.
Russia could export a record 60 MMT of grain in 2022-23, including 50 MMT of wheat, the head of the Russian Grain Union said. Black Sea consulting firm SovEcon estimates Russian grain exports at 2.7 MMT this month, with the volume expected to decline to 1.8 MMT in May and 1.6 MMT in June. SovEcon expects those totals to include 2.2 MMT of wheat in April, 1.3 MMT of wheat in May and 1.1 MMT of wheat in June.
CORN: May corn futures were turned back by the 5-day moving average around $6.67 1/2 overnight and weakened. That level will serve as near-term resistance. Near-term support is in the $6.57 1/2 to $6.56 1/2 range.
SOYBEANS: May soybean futures posted corrective gains overnight but ran out of buyer interest at the 20-day moving average around $14.92. Near-term resistance is in the $14.98 to $15.02 range. Last Friday’s low at $14.80 is near-term support.
WHEAT: May HRW wheat futures saw corrective buying dry up shy of the 5-day moving average at $8.53 1/4. That will serve as near-term resistance. Near-term support extends from $8.39 1/2 to last week’s low at $8.26 1/2.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open lower in reaction to last Friday’s Cattle on Feed Report. The report showed the April 1 feedlot inventory 4.4% smaller than year-ago, with placements down 0.6% and marketings 1.2% lower. Placements didn’t drop nearly as much as analysts expected, which caused some to deem the data highly bearish. But we feel the data, while mildly negative, definitely wasn’t bearish as it showed a year-over-year decline in feedlot inventories for a seventh straight month. The reaction to the data will go a long way in determining if the cattle market has posted its high for the year. A seasonal high during spring is rather common, but bulls could make another push to the upside if support at last week’s lows holds.
HOGS: Lean hog futures are expected to open with a mostly weaker tone amid the persistently declining cash index. The CME lean hog index is down a dime to $71.31 (as of April 20), extending the prolonged decline. Lean hog futures are oversold and due for a correction, but buyer interest will be limited until the cash index puts in a definitive bottom. May lean hog futures finished Friday $5.715 above today’s cash quote. The pork cutout value firmed $2.28 on Friday. While the Choice beef/pork cutout ratio is still historically wide, it has pulled back a little from its recent high. Pork is still cheap compared to beef, which should attract more retailer buying for upcoming holiday and grilling season features.