GRAIN CALLS
Corn: Steady 2 cents higher.
Soybeans: 4 to 8 cents lower.
Wheat: Steady to 3 cents higher.
GENERAL COMMENTS: Corn futures modestly favored the upside overnight and should get a boost from another large daily export sale to China. Wheat also favored the upside at the end of the overnight session, while soybeans declined. Outside markets are heavily price-negative, with front-month crude oil futures down more than $1 and the U.S. dollar index around 1,000 points higher.
USDA reported daily corn sales to China totaling 667,000 MT for 2022-23. Combined with Tuesday’s announcement, there have been 1.279 MMT of corn sales to China the past two days.
Macroeconomic concerns are building as there are worries the banking turmoil that started in the U.S. is spreading in Europe. European banking stocks are taking a hit today, led by Credit Suisse and worries about its financial health. Credit Suisse shares dropped by as much as 10.5% to a new record low, as its largest investor said it couldn’t give the Swiss bank more financial assistance.
Turkey says it is seeking a 120-day extension of the Black Sea grain deal. Russia proposed a 60-day extension.
Argentina’s weather will remain drier than usual in the heart of its crop production region while some showers and thunderstorms occur in the perimeter of crop country. In Brazil, limited rainfall from northern Rio Grande do Sul through Parana and to Minas Gerais will induce better weather for soybean harvest and safrinha corn planting, but rains will continue to fall abundantly in center-west areas.
Members of the National Oilseed Processors Association (NOPA) at 11 a.m. CT are expected to report soybean crush totaled 166.1 million bu. in February. That would be down from 179.0 million bu. in January but up from 165.1 million bu. in February 2022. Soyoil stocks are expected to be reported at 1.829 billion pounds.
China’s economic activity picked up in the first two months of 2023 as industrial output and retail sales strengthened.
CORN: May corn futures gapped higher at the start of overnight trade and pushed above the 10-day moving average. But the contract rolled over and filled the overnight gap. Near-term support extends from the 5-day moving average around $6.16 1/2 to last week’s low at $6.06 3/4. The 10-day moving average at $6.25 1/4 is initial resistance, followed by the overnight high at $6.29.
SOYBEANS: May soybean futures ran out of buyers at the $15.00 level during overnight trade and weakened, falling below the 100-day moving average at $14.86 1/2. The February low at $14.77 3/4 is near-term support, followed by the January low at $14.72.
WHEAT: May SRW wheat futures failed to find sustained buying above the psychological $7.00 mark overnight and weakened. Near-term support starts at the 10-day moving average of $6.92 1/4, just beneath the overnight low, and extends to the 5-day average at $6.84 1/4. The overnight high at $7.06 is near-term resistance.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open lower on pressure from outside markets. While cattle market fundamentals remain bullish, macroeconomic concerns have risen to the surface this week, putting futures on the defensive. Cash cattle are expected to trade higher again this week, though active trade may not be seen until after USDA’s Cattle on Feed Report Friday afternoon. Wholesale beef prices firmed on Tuesday, with Choice up $1.05 and Select 94 cents higher. While movement totaled only 91 loads on the day, the price strength is important as it will keep packer margins solidly in the black despite the continued rise in cash prices. That gives packers incentive to keep actively competing for tightening market-ready supplies.
HOGS: Lean hog futures are expected to open lower on macroeconomic concerns. The CME lean hog index is up 3 cents to $79.89 (as of March 13), extending the recent price upswing. But the lack of strong gains in the cash market will allow futures to be influenced by outside factors. The pork cutout value dropped 43 cents on Tuesday as losses in loins, butts and hams more than offset gains in ribs, bellies and picnics. But movement improved to 337.3 loads amid the lower prices, signaling there’s still solid retailer buyer interest under the market. Meanwhile, a surge in African swine fever (ASF) infections in China is set to reduce its hog output later this year.