GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: Corn and soybeans extended recent losses during overnight trade, while wheat posted modest corrective gains. Outside markets are supportive as the U.S. dollar index is down more than 800 points and front-month crude oil futures are around 50 cents higher.
USDA reported daily corn sales of 114,000 MT to Mexico for 2024-25.
Heightened market attention is on the tariffs/trade situation to open the week. President Trump is set to announce on Tuesday whether he will implement 25% tariffs on imports from Mexico and Canada (with a 10% tariff on Canadian energy imports) and an additional 10% tariff increase on imports from China. Beijing is preparing countermeasures against new U.S. import tariffs, with U.S. agricultural exports in its sights, according to China’s state-backed Global Times. Mexican negotiators are in Washington to meet with Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer in a bid to reach a last-minute deal to avoid U.S. tariffs. Canada is also ramping up efforts to avert U.S. tariffs but is ready with a two-step retaliatory tariff plan targeting C$155 billion ($107.14 billion) of U.S. goods. Lutnick indicated the situation remains “fluid,” suggesting room for negotiation. Market volatility could be extreme as happenings unfold.
Brazil’s soybean harvest jumped 11 percentage points to 50% done as of last Thursday, according to AgRural, two points ahead of the same date last year. Safrinha corn planting surged 16 points to 80%, though that was still six points behind year-ago.
World Weather Inc. says this week’s rainfall in Argentina will be concentrated on the southwest, with the greatest rainfall now expected in far southwestern Buenos Aires and La Pampa instead of areas from southern Cordoba to central Buenos Aires. Northeastern Argentina, Paraguay, Uruguay and southern Brazil will be dry or mostly dry through Saturday and then some scattered showers and thunderstorms will evolve to offer “some” relief from recent drying Sunday through next week.
ABARES raised its 2024-25 Australian wheat production forecast by 2.2 MMT to 34.1 MMT, the third largest ever. ABARES noted yields were better than expected, especially in Western Australia and New South Wales. Australia is expected to export 22.2 MMT of wheat in 2024-25. ABARES projects Australian wheat production will fall 11% to 30.5 MMT in 2025-26, though exports are expected to increase to 22.8 MMT.
CORN: May corn futures matched the lowest level since Jan. 10 during overnight trade. The contract has now retraced more than 61.8% of the rally from the late-November low and more than 50% of the rallies from the August and October lows. Next support is the 100-day moving average just above $4.63 and the 200-day average near $4.57. The contract is heavily oversold from a short-term perspective, but the path of least resistance is clearly down.
SOYBEANS: May soybean futures are trading at their lowest level since Jan. 10, well below the short-term, intermediate and long-term moving averages. While the contract is heavily short-term oversold, that’s not enough to stabilize prices on its own. Near-term support is in the $10.20 to $10.00 range.
WHEAT: May SRW futures are short-term heavily oversold, trading at their lowest levels since late January. While the contract is due for a technical correction, supportive news is lacking, suggesting a further extension of losses is possible. Near-term support extends from $5.50 to the January low at $5.37 3/4.
Short-term chart trends are now bearish for corn, soybeans and wheat.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open lower on followthrough selling after sharp losses and low-range closes last Friday. However, a round of corrective buying could support futures if initial seller interest is limited. With the flip of the calendar, packers have ample supplies of contracted and formulated cattle to pull from, which is likely to extend the recent weakening of cash cattle prices. Wholesale beef prices firmed 65 cents for Choice to $311.83 and slipped 8 cents for Select to $302.05 on Friday. After recent heavy price pressure, wholesale values are showing signs of stabilizing around current levels. Meanwhile, China’s customs authority suspended beef imports from six meat processing plants in Brazil, Argentina and Uruguay, following a safeguard investigation into beef imports initiated in December. The exact distribution of affected plants by country remains unspecified, and no official reason for the suspension was provided. The situation is evolving as the investigation continues, with the potential for further regulatory actions.
HOGS: Lean hog futures are expected to open under pressure on followthrough selling after low-range closes last Friday. However, the big discount April hog futures hold to the cash index may trigger some corrective buying after the open. April hogs finished last Friday $5.765 below today’s CME lean hog index quote of $89.44. The pork cutout fell $2.54 to $98.42 on Friday amid a $22.88 plunge in primal bellies. Belly prices have been volatile, with large daily prices swings over the past week driving movement in cutout.