GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 6 to 12 cents lower.
Wheat: 12 to 16 cents lower.
GENERAL COMMENTS: Bears controlled price action in the grain and soy markets overnight as traders continued to liquidate long positions. Until prices get cheap enough to encourage value buying, there will be more downside risk. Outside markets are mixed, with crude oil modestly weaker and the U.S. dollar index down around 125 points.
USDA reported more daily corn sales to China, this time 178,000 MT for 2022-23. Since March 14, USDA has reported daily old-crop corn sales to China totaling 2.425 MMT.
The Fed will announce its decision on interest rates following its two-day monetary policy meeting this afternoon. Economists expect the Fed to raise rates 25 basis points, with around 80% odds of such, though some anticipate a pause amid the banking sector struggles. While the rate decision will be the primary focal point, markets will also closely monitor new projections from Fed officials on interest rates, inflation, GDP and other key economic figures. Chair Jerome Powell’s post-meeting press conference will also be closing scrutinized for clues to the Fed’s likely path forward.
World Weather Inc. says heavy rains fell in central Argentina as expected overnight, although more is needed after the prolonged drought. Central Brazil crop areas will continue to dry down for a little while longer and that should translate into a better environment for late-season soybean harvest and safrinha corn planting.
SovEcon left its Russian wheat crop forecast at 85.3 MMT, noting weather remains mostly favorable. Although there have been temperature fluctuations, there is no ice crust on fields and most regions have ample soil moisture. Soil moisture improved over the past month in the key southern region after it had been dry earlier.
World Weather reports the GFS model signaling better rain chances for U.S. hard red winter wheat areas but the moisture looks overdone. More snow fell in the Red River Basin on Tuesday and overnight, adding seven inches of additional snow and another 0.65 inch of moisture to the deep snowpack that promises to induce flooding later this spring.
CORN: May corn futures bounced from a spike of the 10-day moving average overnight. The overnight low at $6.23 1/4 is near-term support, with additional support layered down to this month’s low at $6.06 3/4. The 5- and 20-day moving averages around $6.31 1/2 are initial resistance, with additional resistance layered from $6.38 3/4 to $6.48 1/4.
SOYBEANS: May soybean futures fell to a three-and-a-half month low overnight but found support at the 200-day moving average around $14.58 1/2. Below that level, next support would be in $14.40 to $14.20 range. Previous support layered from $14.65 3/4 to $14.77 3/4 is near-term resistance.
WHEAT: May SRW wheat futures sharply extended Tuesday’s losses overnight. Near-term support is this month’s low at $6.61. Below that, support is the $6.50 to $6.46 range. Overhead resistance starts at $6.77 1/2.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Mixed to lower.
CATTLE: Live cattle futures are expected to open with a mixed tone as traders continue to wait on active cash cattle trade. Most sources expect cash prices to be near steady this week. But April live cattle futures finished Tuesday nearly $2 below last week’s average cash price, signaling trader pessimism despite bullish supply fundamentals. Part of their trepidation is tied to macroeconomic concerns, while fundamental pressure is coming from falling wholesale beef prices. Choice boxed beef prices fell another $1.10 on Tuesday and are now $10.28 below the March 6 peak. Despite the fall in wholesale beef prices, packer margins have remained in the black. That will give them incentive to be more aggressive with cash bids amid a tightening supply of market-ready cattle once the wholesale market posts a seasonal low, which should come soon.
HOGS: Lean hog futures are expected to open mostly lower on followthrough selling after another poor close on Tuesday. While the market is short-term oversold and due for a correction, the path of least resistance remains down. After dropping on Monday, the CME lean index is down another 88 cents today (as of March 20). Over the past two days, the cash index has given back $1.34 of the $7.90 rally from the Jan. 23 low. April lean hog futures finished Tuesday $8.40 below where the market ended Jan. 23 and at a $1.62 discount to today’s cash quote, signaling attitudes have eroded even amid the seasonal rise in cash prices. The pork cutout value slipped 12 cents on Tuesday, though movement improved to 358.1 loads.