GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: Winter wheat 8 to 12 cents lower; spring wheat 1 to 3 cents lower.
GENERAL COMMENTS: Grain and soy futures weakened overnight, led by the winter wheat markets. We expect the overnight price pressure to carry over to the start of daytime trade. But fund activity will be key to whether overnight losses are actively extended or buyers surface under the market. Outside markets are mildly negative, with front-month crude oil futures down around 50 cents and the U.S. dollar index modestly firmer this morning.
Another week of poor rainfall is expected in southern Argentina and then some increase in shower activity is possible, according to World Weather Inc. Brazil’s weather will remain wet during the next two weeks in central areas of the country, keeping soybean harvest and safrinha corn planting slower than desired. Drying is expected in northeastern Brazil, while timely rains are expected in the far southern state of Rio Grande do Sul.
World Weather says bitter cold in Canada and the north-central U.S. will prevail into the weekend, but warming should follow for a few days before another round of bitter cold evolves in early March. U.S. hard red winter wheat areas will not be harmed by the coming bitter cold because the coldest areas will get snow ahead of the arctic conditions. West-central and southwestern portions of the Plains will remain drier biased for the next two weeks.
Ukraine will ask Turkey and the United Nations this week to start talks to roll over the Black Sea grain deal, seeking an extension of at least one year that would include the ports of Mykolaiv, a senior Ukrainian official said. Ukraine will also insist on an increase in the number of inspection teams “in order to eliminate the accumulation of vessels waiting for inspections.”
Traders will closely monitor the minutes from the latest Federal Open Market Committee (FOMC) meeting that will be released this afternoon for guidance on coming monetary policy. Recent inflation data has shifted traders’ thinking that the Fed would end its monetary tightening around midyear.
CORN: March corn futures posted a modest inside day down on the daily chart overnight. Near-term resistance extends from Tuesday’s high $6.83 to the January high at $6.88 3/4. Near-term support is layered from $6.77 3/4 to this month’s low at $6.69 1/4. The 5-, 40-, 50-, 100- and 200-day moving averages all lie withing that range.
SOYBEANS: March soybean futures failed to find sustained buyer interest above Tuesday’s high during overnight trade and mildly weakened. The Feb. 13 high at $15.55 1/2 is near-term resistance, followed by the contract high at $15.72 1/4. Near-term support is Tuesday’s gap from $15.35 to $15.33 1/4. Filling the gap would also violate the 5- and 10-day moving averages.
WHEAT: March SRW wheat futures weakened further overnight as the contract is now solidly below the short-, intermediate and long-term moving averages. Near-term support extends from the $7.40 area to the January low at $7.12 1/2. Near-term resistance is in the $7.55 1/2 to $7.60 1/2 range where the 20-, 40- and 50-day moving averages stand.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Higher.
CATTLE: Live cattle futures are expected to see two-sided trade this morning as traders wait on cash cattle trade to develop. While higher cash prices are expected, active trade may not be seen until Friday afternoon following USDA’s Cattle on Feed Report. Besides bullish cash cattle expectations, wholesale beef prices continue to strengthen. Wholesale beef prices firmed another $4.31 in Choice boxes and $2.79 for Select on Tuesday. At $287.20, the Choice cutout value reached the highest level since Jan. 31, 2021. Surging wholesale beef prices are keeping packer margins solidly in the black and giving them incentive to actively compete for a tightening supply of market-ready cattle.
HOGS: Lean hog futures are expected to open higher on followthough buying after a strong close that signaled an upside breakout from the six-week consolidation pattern and the strengthening market. But we can’t rule out some selling pressure if early buyer interest is limited as April futures are now more than $12 above the cash index. The CME lean hog index is up another 35 cents to $76.76 (as of Feb. 18), extending the string of recent price gains and is now $4.65 off its Jan. 23 low. The pork cutout value fell $4.71 on Tuesday, nearly erasing all of Monday’s strong gains as all cuts except hams and pics declined.