GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: Winter wheat 10 to 20 cents lower; spring wheat 8 to 12 cents lower.
GENERAL COMMENTS: Wheat futures led losses during the overnight session amid expectations the Black Sea export deal will be extended and on technical-based selling. Corn and soybeans posted lesser price declines. Followthrough selling from the overnight session is expected at the start of daytime trade. Money flow will be key as funds must decide whether to actively liquidate long positions or step up as buyers on the break. Crude oil futures are around $1 lower and will add outside market pressure. The U.S. dollar index is modestly weaker, though not enough to encourage buying in the grain/soy markets.
USDA reported daily corn export sales of 110,000 MT to Japan and 182,400 MT to unknown destinations – both for 2022-23. These are the first daily corn sales since Feb. 17.
With the March 18 deadline around the corner, traders are starting to pay more attention to rhetoric on the Black Sea grain export deal. Turkish Foreign Minister Mevlut Cavusoglu said on Sunday Ankara is working hard to extend the deal. Russia has said it would only agree to extend the Black Sea grain deal if the interests of its own agricultural producers are taken into account. Traders anticipate Russia will talk tough before eventually agreeing to extend the deal.
Dry areas of southwest Argentina are likely to receive some rains this week. Central and southeastern areas of Argentina will be mostly dry this week but could receive “some relief” from dryness next week, according to World Weather Inc. Weather in south-central Brazil is expected to gradually improve as intensity and frequency of rains will diminish, though some areas will continue to receive heavy rainfall and soils will remain too wet for rapid advancement of soybean harvest and safrinha corn planting.
Traders will begin preparations for USDA’s March Supply & Demand Report on Wednesday. Traders expect the biggest change on the corn balance sheet, with cuts to exports and corn-for-ethanol use a possibility, which would lift ending stocks. Minor revisions to soybean (down) and wheat (up) ending stocks are anticipated. Much of the focus will be on USDA’s South American production forecasts, especially for Argentina. Expects cuts to the Argentine crop estimates are likely to increase USDA’s global corn and soybean ending stocks forecasts for 2022-23.
CORN: May corn futures have formed a bear flag on the daily chart. That makes last week’s low at $6.22 1/4 key near-term support. Violation of that level would project the contract about 45 cents lower. Near-term resistance extends from $6.42 3/4 to $6.48.
SOYBEANS: May soybean futures failed to hold above the 10-day moving average after closing above it Friday but found some support at the 50-day average around $15.11 1/2. Near-term support extends from that level to last week’s spike low at $14.77 3/4. Near-term resistance extends from $15.18 1/4 to $15.25.
WHEAT: May SRW wheat futures posted a downside breakout from the bear flag overnight, which projects the contract sharply lower, depending on what level is used for the start of pole of the formation. Next solid flat support is in the $6.85 to $6.81 3/4 range. Near-term resistance extends from the psychological $7.00 mark to previous support at $7.20 3/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a firmer tone on support from bullish cash market fundamentals, though we anticipate buyers will remain relatively cautious. Cash cattle prices firmed again last week and traders come into this week anticipating the cash market will continue to strengthen amid tightening market-ready supplies and profitable margins, which are being supported by firming wholesale beef prices. Choice boxed beef prices firmed 82 cents on Friday, while Select dropped 72 cents. Packer margins remain solidly in the black, which gives packers incentive to continue to actively compete for cattle.
HOGS: Lean hog futures are expected to open with a mixed tone in light, two-sided trade. While the cash market continues to strengthen seasonally, traders have shown no willingness to build too much premium into spring- and summer-month contracts. In fact, they’ve reduced those premiums recently. While the cash index is firming, the wholesale pork market is spinning its wheels. Packers moved only 210.9 loads of pork on Friday, despite a 16-cent decline in the cutout value. The Choice beef/pork cutout ratio at nearly 3.4 continues to signal pork is competitively priced compared to beef, but packers have struggled to push the cutout above the mid-$80 range and maintain strong retailer buyer interest.