GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: 2 to 5 cents lower.
GENERAL COMMENTS: Corn and soybeans faced followthrough selling overnight, while wheat pulled back from Monday’s corrective gains. The macroeconomic fears from Monday have calmed but aren’t gone. Corn could get a boost this morning from news of export sales to China. Outside markets lean negative for grains, with front-month crude oil futures trading around $1.50 lower this morning. The U.S. dollar index has backed off its overnight gains and is near unchanged.
USDA reported daily sales of 612,000 MT of corn to China for 2022-23.
A Russian official said the deal allowing Ukraine to export grain through its Black Sea ports has been extended for 60 days, though Kyiv rejected that offer and was still seeking a 120-day extension. “Indeed, the deal has been extended – it has been agreed that it has been extended for 60 days,” TASS news agency cited Russia’s Deputy Foreign Minister Alexander Grushko as saying. Asked why Russia had extended the deal for 60 days as opposed to the 120-day extension period set out in the agreement, a Kremlin spokesperson said Moscow’s decision was “a gesture of goodwill... in the hope that after such a long time, the obligations that have been assumed will be fulfilled.” The Kremlin said the deal could not “stand on one leg,” while criticizing the West for not doing enough to remove obstacles to its grain and fertilizer exports. Meanwhile, UN and Turkish officials said while Russia agreed to extend the deal 60 days, negotiations were ongoing.
South American crop consultant Dr. Michael Cordonnier cut another 3 MMT each from his Argentine soybean and corn crop estimates. He now forecasts the soybean crop at 28 MMT and the corn crop at 37 MMT. His minimum forecasts were lowered to 25 MMT for soybeans and 22 MMT for corn. Cordonnier left his Brazilian crop estimates at 151 MMT for soybeans and 121 MMT for corn.
World Weather Inc. says Argentina’s weather will remain too dry. Some showers are expected, but drought-busting rain will be hard to come by for a while. It says Brazil weather will be less wet for parts of Parana, Sao Paulo and southern Minas Gerais over the next 10 days, although rain is still expected periodically. Center-west Brazil as well as Tocantins, Maranhao, Piaui, Goias and western Bahia are expected to get some periodic rainfall through the next two weeks, maintaining wet field conditions.
The U.S. consumer price index (CPI) rose 6.0% annually during February, down from a 6.4% rise in January and in line with expectations. Core CPI rose 5.5% annually last month, which was down from 5.6% in January and also in line with expectations.
CORN: May corn futures have formed another bear flag on the daily chart after last week breaking down from a previous similar formation. Key near-term support is last week’s low at $6.06 3/4, followed by the psychological $6.00 mark. Initial resistance is the 5-day moving average at $6.15 3/4, followed by previous support at $6.22 1/4.
SOYBEANS: May soybean futures extended Monday’s sharp declines overnight but stopped just of the 100-day moving average around $14.85 1/2. That level will serve as initial support, followed by the February low at $14.77 3/4. The psychological $15.00 mark is initial resistance, followed by the 5-day moving average around $15.03 1/2.
WHEAT: May SRW wheat futures failed to build on Monday’s corrective gains overnight. Initial resistance is the 10-day moving average at $6.92 1/2, followed by Monday’s high at $6.96. Near-term support extends from $6.77 1/2 to last week’s low at $6.61.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a mixed tone. Live cattle futures faced pressure from macroeconomic concerns on Monday, which extended the April contract’s discount to the cash market. That could lead to some corrective buying today, though we expect buyers to remain cautious toward the long side of the market. Last week’s average cash cattle price rose 38 cents to $165.40, while April live cattle futures ended Monday at $163.55. After buying more cattle than anticipated last week, packers will try to get feedlots to move animals at weaker prices this week, but we anticipate they will be no worse than steady values. Choice boxed beef prices dropped a nickel on Monday, while Select rose $2.08. Movement was light at 83 loads for the day.
HOGS: Lean hog futures are expected to open with a choppy tone this morning. Hog futures got caught up in the macroeconomic concerns on Monday. While some of those concerns have calmed, we doubt buyers will rush to the hog market. The CME lean hog index is up another 24 cents, extending its slow-and-steady seasonal climb. April lean hog futures finished Monday $6.365 above today’s cash index quote (as of March 10). The pork cutout value rose $1.00 on Monday as all cuts except bellies firmed. At $88.80, the cutout value is at levels where retailers have been slower buyers in the recent past, which has capped price advances. Movement was moderate at 252.2 loads on Monday, suggesting retailers may again be showing resistance to further price advances.