GRAIN CALLS
Corn: 2 to 5 cents higher.
Soybeans: 3 to 8 cents lower.
Wheat: 10 to 20 cents higher.
GENERAL COMMENTS: Wheat futures firmed overnight amid Black Sea supply uncertainty. Corn followed to the upside, while soybeans extended their selloff. Outside markets are heavily price-negative with front-month crude oil futures down around $2.50 and the U.S. dollar about 650 points higher. Plus, there are more macroeconomic worries tied to the banking sector.
China’s U.S. corn buying spree continued as USDA reported another daily corn sale totaling 204,000 MT for 2022-23. Since March 14, USDA has reported daily old-crop corn sales to China totaling 2.752 MMT.
Russia could recommend a temporary halt in wheat and sunflower exports after a sharp drop in global prices in recent weeks, the Vedomosti newspaper reported, citing two sources who attended a government meeting. The newspaper said Russia’s ag ministry would meet industry representatives soon to discuss the idea of a temporary curb on exports. Russia said earlier this week it would look to more than triple purchases of grain for the state reserve fund to 10 MMT.
Interfax news agency also reported Russia could extend restrictions on fertilizer exports for six months until November to help support the domestic market, quoting Agriculture Minister Dmitry Patrushev.
Ships carrying cargoes from Ukraine’s three Black Sea ports covered under the grain export deal continued to be insured. But the shorter renewal term raises concerns over forward shipments beyond the 60-day period, according to Lloyd’s of London. An official with the insurer told Reuters, “There is clearly underlying risk that if events change and somebody wanted to sink a ship to make a point, that clearly our appetite for continuing with those kind of risks might change.”
Peter Zeihan, a geopolitical strategist, speaker, and author who specializes in global energy, demographics, and security, said Russia’s next target will be Ukraine’s agricultural infrastructure and exports.
CORN: May corn futures found support at the 10-day moving average overnight and bounced. Thursday’s high at $6.44 is near-term resistance. There’s an inverted head-and-shoulders formation on the daily chart if the contract clears the neckline by closing above Thursday’s high. Near-term support starts at this week’s low at $6.23 1/4.
SOYBEANS: Soybean futures sharply extended the recent selloff overnight. The market is heavily oversold, but traders are showing no signs of letting up. Open interest and volume have climbed in soybean futures the past two days, signaling traders have shifted from liquidating long positions to building new short positions. Next support for May soybean futures is the psychological $14.00 mark, followed by layered support from $13.97 to $13.80.
WHEAT: May SRW wheat futures pushed above the 5-day moving average overnight. Next resistance is the 10-day moving average at $6.88 1/2 and the 20-day average near $6.93. This week’s low at $6.54 is near-term support.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mixed tone as more choppy price action is expected. More cattle sold on Thursday at similar prices from earlier in the week – down $1 in the Southern Plains and steady to $1 higher in the northern market. Thursday’s Cold Storage Report was favorable for beef as inventories during February declined more than average. But we doubt that will have much market impact as focus remains more on outside market factors, which are negative.
HOGS: Lean hog futures are expected to open with a mixed to mostly lower tone as traders remain reluctant buyers and when futures do firm, there’s fresh seller interest. The CME lean hog index is down another 44 cents to $77.39 (as of March 22) and has fallen $2.62 the last four days. April futures finished Thursday $1.64 below today’s cash quote, signaling traders still have bearish attitudes toward the cash market. The contract is also sharply oversold based on short-term momentum indicators, but traders are showing no willingness to correct that situation.