GRAIN CALLS
Corn: 2 to 5 cents lower.
Soybeans: 10 to 20 cents lower.
Wheat: 3 to 7 cents lower.
GENERAL COMMENTS: Soybeans faced active followthrough selling overnight, while corn and wheat faded late in the session. All three markets closed near their session lows, which points to a continuation of the overnight pressure during daytime trade. Outside markets should be price-supportive with crude oil nearly $2 higher and the U.S. dollar index more than 100 points lower, but that failed to entice any buyer interest during overnight trade.
South American crop consultant Dr. Michael Cordonnier cut his Argentine soybean and corn crop estimates another 2 MMT each to 32 MMT and 41 MMT, respectively, amid persistent weather stress. Cordonnier also cut his Brazilian corn crop estimate 2 MMT to 121 MMT, noting “20% to 30% of the safrinha corn will be planted late or extra late.” He left his Brazilian soybean crop estimate at 151 MMT.
Argentina’s outlook is still not offering much drought relief in central or southern locations, but week two of the forecast has some potential for needed rain, according to World Weather Inc.
Brazil’s weather forecast has not changed much with periods of rain likely across much of the country excluding the northeast where parts of Bahia, northeastern Minas Gerais and Espirito Santo will be dry until late in the second week when some rain will finally evolve, World Weather says.
Individual state crop conditions ratings showed further deterioration of the HRW wheat crop during February, due largely to a decline in top producer Kansas. The “good” to “excellent” ratings for HRW wheat stood at 19% in Kansas (down two points from the end of January), 36% in Oklahoma (up 19 points), 19% in Texas (up five points), 29% in Colorado (down nine points), 19% in Nebraska (down three points), 23% in South Dakota (up one point) and 21% in Montana (up five points). When the updated crop condition ratings were plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 being perfect), the HRW crop dropped 5.0 points from the end of January to a rating of 264.1. The HRW crop went into dormancy with the lowest fall CCI rating on record of 280.3.
U.S. HRW wheat areas will not get much precipitation for a while, although another disturbance is expected to impact parts of the region Thursday into Friday and again March 8-9, according to World Weather.
Today is first notice day for March grain and soy futures – the start of the delivery process. Deliveries totaled: corn 352 (0 to 200 expected); soybeans 411 (0 to 200 expected); soymeal 0 (0 expected); soyoil 8 (0 to 500 expected); SRW wheat 910 (0 to 500 expected); HRW wheat 245 (0 to 200 expected); and HRS wheat 575 (0 to 200 expected).
CORN: May corn futures mildly extended sharp losses from the previous four days during overnight trade. Key near-term support is the December low at $6.36 3/4. A drop below that level could entice active chart-based selling. Near-term resistance is previous support in the $6.44 3/4 to $6.49 range.
SOYBEANS: May soybean futures extended the recent corrective selling overnight, falling below the last reaction low at $15.00 1/4. Next solid support is at $14.76, which lines up with the 100-day moving average. Near-term resistance is the 50-day moving average at $15.09 1/2 and the 40-day average near $15.14.
WHEAT: May SRW wheat futures somewhat paused overnight after the technical carnage the two previous days. Initial support at $7.05 3/4 appears temporary. Additional support is at the psychological $7.00 mark and then in the $6.94 to $6.81 3/4 range. Previous support at $7.20 3/4 is near-term resistance.
LIVESTOCK CALLS
CATTLE: Choppy to higher.
HOGS: Choppy to lower.
CATTLE: Live cattle futures are expected to open with a mixed tone, though bullish fundamentals will provide underlying support and limit seller interest. Choice boxed beef prices firmed $1.06 on Monday, extending the recent strong price rally, while Select gained $2.17. Last week’s average cash cattle price of $163.72 was the highest since April 2015. While packers have actively raised cash prices, their margins have remained solidly in the black due to the strong wholesale beef price gains. Packers have access to fresh contract supplies for March this week, which may slow down the recent price advance, but cash sources still anticipate another week of strength in the cash market.
HOGS: Lean hog futures are expected to open with a weaker tone following a poor finish on Monday. But some buying could surface if early seller interest is limited. A 24-cent decline on Monday snapped a 15-day string of gains in the CME lean hog index, but the rebound from the seasonal low resumed with a 73-cent gain today (as of Feb. 24). April lean hog futures finished Monday $6.505 above today’s cash quote, which is close to the five-year average gain in the cash index from now until mid-April. The pork cutout value firmed 59 cents on Monday to $85.94, which is cheap compared to Choice beef. Movement was solid at 270.5 loads.