GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 8 to 12 cents lower.
Wheat: Winter wheat 1 to 3 cents lower. Spring wheat mixed.
GENERAL COMMENTS: Corn, soybean and winter wheat futures faced pressure overnight, while spring wheat was narrowly mixed. We expect that price pressure to carry over to the start of daytime trade. Outside markets are price-negative, with crude oil around 75 cents lower and the U.S. dollar about 550 points higher this morning. Key for grain and soy futures will be whether funds step in as buyers on the weakness or actively liquidate long positions.
USDA reported daily corn export sales totaling 213,370 MT to Mexico for 2022-23.
World Weather says forecasts models continue to call for mostly dry conditions over southern Argentina through the end of this month. Brazil will remain too wet for the next two weeks in Parana, Sao Paulo, southern Minas Gerais and a part of Mato Grosso do Sul. Mato Grosso will see good harvest and safrinha corn planting weather at times the remainder of this week, but rain will increase during the weekend and next week, slowing field progress once again.
A farmer group says persistent drought in Rio Grande do Sul limits soybean crop potential in the state. In the worst-case scenario, output in Brazil’s far southern state could fall by 40% to 12.6 MMT, a large drop from its 21 MMT production potential, said Decio Teixeira, vice-president of Rio Grande do Sul’s farmer group Aprosoja-RS. Conab, Brazil’s crop estimating agency, last week estimated the country’s soybean crop at 152.9 MMT, including 19 MMT in Rio Grande do Sul.
India’s soybean meal exports are increasing sharply as drought has hit output from top exporter Argentina, with 500,000 MT likely to be shipped from the country in February and March combined, three exporters told Reuters. India’s soymeal exports in the first four months of the 2022-23 marketing year, which began Oct. 1, totaled 631,000 MT, nearly matching the 644,000 MT exported the previous year, according to the Soybean Processors Association of India. Indian soymeal is being offered for around $580 to $585 per metric on a free-on-board (FOB) basis for March shipments, compared to $598 offered by Argentina, exporters said. “If global prices sustain at the current level, then India could easily export more than 2 MMT in 2022-23,” said an exporter.
Ukraine called on the United Nations and Turkey to press Russia to immediately stop hindering Ukrainian grain shipments. Ukraine has repeatedly accused Russia of delaying grain inspections. The Black Sea grain export agreement was extended 120 days in November and is up for renewal again next month, but Russia has signaled it is unhappy with some aspects of the deal and asked for sanctions affecting its agricultural exports to be lifted.
SovEcon raised its 2022-23 Russian wheat export forecast by 100,000 MT to 44.2 MMT amid what it expects to will a record pace of shipments for the February through June period. That would be up from shipments of 33.4 MMT in 2021-22.
Members of the National Oilseed Processors Association (NOPA) are expected to report January soybean crush totaled 181.7 million bu., according to a Reuters survey. If realized, that would be up 2.3% from December but 0.3% less than January 2022.
CORN: March corn futures extended Tuesday’s corrective declines overnight, dipping below the 5-, 10- and 20-day moving averages. Near-term support is at the 40-day average at $6.71 3/4, followed by the last reaction low at $6.69 1/4. Strong near-term resistance is at the January high of $6.88 3/4. Bulls have been unable to clear that level twice, including during Tuesday’s session.
SOYBEANS: March soybean futures extended Tuesday’s corrective pullback overnight as the contract fell below the 5- and 10-day moving averages. Support is now at the 20-day average around d $15.21 and the 40-day average near $15.09. Monday’s high at $15.55 1/2 is tough near-term resistance.
WHEAT: March SRW wheat futures pivoted around Tuesday’s close in light trade overnight. Near-term support is at the 5-day moving average at $7.81 1/4, followed by old resistance at $7.76 1/2. Tuesday’s high at $7.97 1/2 is near-term resistance, followed by the December high at $7.99.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone in what’s likely to be choppy price action as traders wait on cash cattle trade to develop. While the cash market is firming and long-term fundamentals are bullish, traders have shown a willingness not to build too much premium into futures. February live cattle finished Tuesday $2.53 above last week’s average cash price, while the April contract held a $5.055 premium. Active cash cattle trade isn’t expected until Friday unless packers unexpectedly raise cash bids prior to that as feedlots seemingly have little interest in selling cattle at lower prices. Wholesale beef trade may add some support today, as Choice values firmed $2.11 and Select rose $2.57 on solid movement of 113 loads. Monday’s contract high at $165.25 is near-term resistance for April live cattle, while support extends from the 10-day average at $163.93 to last week’s low at $163.15.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, though choppy trade is possible. After followthrough buying yesterday on the heels of Monday’s strong gains, hog futures are showing signs of pushing above the month-long consolidation range. Such a move would likely attract more chart-based speculative buyer interest. Fundamental support is coming from the firming cash hog index, which continues its recent, steady price climb from the seasonal lows. The CME lean hog index is up another 54 cents to $75.18 (as of Feb. 13), the ninth straight daily gain and 13 of the last 15 it has firmed. The pork cutout value firmed 14 cents to $81.88 on Tuesday and movement was strong at 315.4 loads. Near-term resistance for April hogs is at $88.35 and the 40-day moving average at $88.89.