GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 2 to 5 cents higher.
Wheat: SRW 2 to 4 cents lower; HRW 6 to 10 cents lower; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn and soybeans ended with modest corrective gains overnight, while the winter wheat markets faced followthrough selling after poor closes last Friday. Weather is price-negative for winter wheat, while outside markets are mixed. Front-month crude oil futures are modestly weaker and the U.S. dollar index is around 350 points lower this morning.
Argentina will see restricted rainfall during the next 10 days in central and southern areas while rain is expected later this week in northern locations, according to World Weather Inc. The forecaster says Brazil will see rain periodically in all crop areas during the next couple of weeks except in Bahia, northeastern Minas Gerais and Espirito Santo.
As of last Thursday, Brazil had harvested 33% of its soybean crop, according to AgRural, 10 percentage points behind last year. Safrinha corn planting advanced to 55%, though that was eight points behind last year. AgRural says the main areas of concern with soybean harvest and safrinha corn planting are in Paraná and Mato Grosso do Sul.
Thunderstorms occurred overnight in western hard red winter wheat areas of the Plains, with beneficial rains from western Kansas southward into the Texas Panhandle. The heaviest amounts were seen across eastern HRW areas. West Texas will receive some rains this week but will stay mostly dry over the next 10 days.
Individual states will release updated winter wheat crop condition ratings after markets close this afternoon.
CORN: March corn futures found support at last Friday’s low of $6.49 3/4 overnight. Below that level, support is at the January low at $6.48 1/4 and then the December low at $6.35. Near-term resistance is at previous support at $6.61 1/4 and the 5-day moving average at $6.63. The contract is oversold and due for a corrective bounce.
SOYBEANS: March soybean futures pivoted around last Friday’s closing level in two-sided trade overnight. Near-term support is the 40-day moving average at $15.17 3/4, followed by the Feb. 15 low at $15.16 1/2 and the 50-day average near $15.11. Near-term resistance is layered from $15.31 to $15.36 1/4, where the 5-, 10- and 20-day moving averages stand.
WHEAT: March SRW wheat futures traded lower overnight but failed to find sustained selling below last Friday’s low of $7.03. The overnight low at $7.01 1/2 is initial support, followed by the psychological $7.00 mark. Previous support at $7.12 1/2 is near-term resistance.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a firmer tone on support from last Friday’s Cattle on Feed and Cold Storage data. All three categories in the Cattle on Feed Report were on the bullish side of the pre-report estimates, with on feed at 95.9%, placements at 96.4% and marketings at 104.2% of year-ago levels. While the report data was mildly friendly compared to the pre-report expectations, the underlying numbers are fully bullish as feedlot supplies and available calves for placement on feed continue to tighten. USDA’s Cold Storage Report showed beef stocks dropped contra-seasonally during January. Beef stocks at the end of January totaled 532.7 million lbs., down 11.2 million lbs. (2.6%) from December. The five-year average was a 7.7-million-lb. increase in beef stocks during the month. While a firmer tone is expected on the open, the market hasn’t shown the ability to sustain strong opens, so two-sided trade is possible throughout the day.
HOGS: Lean hog futures are expected to open with a mixed tone in what is likely to be light trade. Last Friday’s Cold Storage Report showed pork stocks climbed slightly more than average during January, though the data shouldn’t have a major impact on today’s price action. Pork stocks totaled 517.7 million lbs., up 61.3 million lbs. (13.4%) versus December, whereas the five-year average was a 54.6-million-lb. increase during the month. Spring- and summer-month lean hog futures still hold slightly greater-than-average premiums to the cash hog index, which is likely to limit buyer interest.