GRAIN CALLS
Corn: Steady to 3 cents higher.
Soybeans: 2 to 5 cents higher.
Wheat: 1 to 4 cents lower.
GENERAL COMMENTS: Corn and soybeans traded mostly higher overnight, though buyer interest was limited in new-crop contracts. Wheat pulled back from recent corrective gains. Outside markets are mildly price-supportive with front-month crude oil futures modestly firmer and the U.S. dollar index down a little more than 100 points.
USDA reported another 641,000 MT of daily corn sales to China for 2022-23, bringing the three-day total to 1.920 MMT.
The marketplace has been somewhat assuaged by news the Swiss central bank has thrown its financial support behind the troubled Credit Suisse bank. Credit Suisse’s CEO said his bank will continue its “strategic transformation to deliver value to our clients.” Credit Suisse’s stock price jumped 20% Thursday. However, many long-time market watchers are “waiting for the next shoe to drop” in the banking crisis.
According to Sevens Report: “In 2008, the assets held at banks (mortgages on homes) were hopelessly underwater. The home values were much less than the mortgages owned, which created massive losses and solvency issues. Today, the assets held at banks (Treasuries and agency backed mortgages) are worth what banks paid for them (par value) as long as they don’t have to be sold in distress. This makes this a liquidity issue (which central banks can solve) not a solvency issue (which only governments can solve). That’s an important and positive difference.”
Cordoba to Entre Rios, Argentina and farther east to southern Rio Grande do Sul, Brazil is advertised to receive heavy rain early next week by both the American and European forecast models today. World Weather Inc. says, “This event may be overdone, although it does have some potential to provide relief to chronic dryness in a portion of central Argentina. Confidence is low today and the official forecast will decrease the model advertised rain totals, but the system will be closely monitored.”
Argentina’s soybean crushing plants are operating at the lowest capacity in history due to impacts from drought, the leader of the country’s top grains processing chamber said. Gustavo Idigoras, head of the CIARA oilseed and grain processing chamber, said the industry faces a “crisis” with industrial capacity idleness approaching 70%, the highest ever when there are no protests. Argentine soy crush plants may have to import soybeans from Brazil and Paraguay, Idigoras said, adding that this would not exceed 8 MMT.
Port of Paranagua authorities downplayed concerns that traffic disruptions on the main road to access the key grain export hub are delaying shipments of Brazil’s record soybean crop. A grain trader told Reuters some ships are waiting up to 35 days to load cargos at Paranagua.
Export sales for the week ended March 9:
Corn: Net sales of 1.236 MMT for 2022-23 declined 13% from the previous week but were 28% above the four-week average. China purchased 73,200 MT of U.S. old-crop corn during the week. Traders expected old-crop sales of 700,000 MT to 1.5 MMT. Net sales of 183,500 MT were reported for 2023-24.
Soybeans: Net sales of 665,000 MT for 2022-23 were up sharply from the previous week and the four-week average. China purchased 208,100 MT of U.S. old-crop soybeans during the week. Traders expected old-crop sales of 50,000 to 700,000 MT.
Wheat: Net sales of 336,700 MT for 2022-23 rose 26% from the previous week and 23% from the four-week average. Traders expected old-crop sales of 75,000 to 500,000 MT. USDA also reported 2023-24 sales of 155,900 MT.
CORN: May corn futures found support at the 10-day moving average around $6.25 1/2 overnight. That level will serve as initial support, with additional support layered down to last week’s low at $6.06 3/4. Near-term resistance starts at Wednesday’s high of $6.29 and then previous support at $6.36 3/4.
SOYBEANS: May soybean futures bounced from the 10-day moving average near $14.87 1/2, which is initial support. Additional support is layered Wednesday’s low of $14.80 to the January low of $14.72. Near-term resistance starts at Wednesday’s high at $15.00 and extends to the 10-day moving average near $15.07.
WHEAT: After four days of corrective gains, May SRW wheat futures posted an inside day down overnight. Wednesday’s high at $7.06 is initial resistance, followed by the 20-day moving average at $7.14 1/2. Near-term support is the 5-day moving average near $6.92 and the 10-day average at $6.91 1/2.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open lower on followthrough selling. While the market is short-term oversold and futures are trading below the cash market, the path of least resistance is down and funds are in liquidation mode. If early followthrough selling is limited, futures could bounce but there may be fresh sellers on any price strength. The sharp break in cattle futures on Wednesday tied to macroeconomic concerns pulled the cash market lower, with initial trade down $1 to $2. That was well below the steady to slightly higher cash prices that would likely have been seen without the outside market influence. April live cattle futures finished yesterday $3.85 below last week’s average cash price, signaling traders have built in more than this week’s cash decline amid the fear-based selloff. Wholesale beef prices also dropped, with Choice down $1.64 and Select $1.93 lower. USDA reported net beef sales of 17,700 MT for 2023, up notably from the previous week and 24% above the four-week average.
HOGS: Lean hog futures are expected to open lower on followthrough selling after Wednesday’s macroeconomic-driven selloff. Some of those concerns have eased, but fundamental pressure will come from weakness in the wholesale pork market. The pork cutout value dropped $1.99 on Wednesday amid heavy losses in loins, picnics and hams. Despite the sharp price pressure, wholesale pork movement slowed to 244.4 loads. While the product market is struggling, the cash market continues to gradually firm, with the CME lean hog index up 4 cents to $79.93 (as of March 14). April lean hog futures finished Wednesday $3.82 below today’s cash index quote. USDA reported net pork sales of 35,600 MT for 2023, up 62% from the previous week but down 5% from the four-week average. China was the third largest buyer at 5,000 MT behind Mexico (9,900 MT) and Japan (6,400 MT).