GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 4 to 8 cents higher.
Wheat: Winter wheat steady to 3 cents lower; spring wheat 4 to 6 cents higher.
GENERAL COMMENTS: Corn posted modest corrective gains overnight, while soybeans also firmed. Winter wheat futures continued to struggle to find buyers. Outside markets are modestly price-supportive this morning with crude oil slightly firmer and the U.S. dollar index down around 250 points.
The Rosario Grain Exchange slashed its estimate of Argentina’s soybean crop by 7.5 MMT to 27 MMT. That would be the smallest crop since the country produced 21.2 MMT of soybeans in 1999 – and warned there could be additional crop losses if temps don’t moderate and there aren’t timely late-season rains. The exchange also slashed its corn crop forecast by 7.5 MMT to 35 MMT.
Argentina rainfall “may” increase after March 15, according to the latest model runs overnight. World Weather said confidence is relatively good for some increase in rainfall, but how significant that may be remains to be seen. Brazil will remain wet over the next 10 days to two weeks except in Rio Grande do Sul and a few areas in Bahia and Espirito Santo where limited rain is expected to continue.
Conab lowered Brazil’s soybean crop forecast by 1.5 MMT from last month to 151.4 MMT, though that would still be record production. The Brazilian government’s official crop estimating agency raised its corn crop forecast by 930,000 MT to a record 124.7 MMT. Conab cut its 2022-23 soybean export forecast by 910,000 MT to 92.99 MMT, while it raised corn exports 1 MMT to 48 MMT.
Ukraine’s grain harvest may fall 37% to 34 MMT in 2023 because of fewer planted acres and lower yield, the country’s national academy of agricultural science said. The academy also said a possibly larger area planted to oilseeds could result in a 13% rise in Ukraine’s oilseed harvest, which it said could reach 19.3 MMT.
Export sales for the week ended March 2:
Corn: Net sales of 1.412 MMT for 2022-23 jumped 57% from the four-week average and easily topped pre-report expectations ranging from 600,000 MT to 1.2 MMT. Exports of 1.052 MMT were a marketing-year high.
Soybeans: Net sales reductions of 23,200 MT for 2022-23 were a marketing-year low. China was a net buyer of 178,500 MT for the week. Traders expected net sales of 200,000 to 750,000 MT. China was a net buyer of 178,500 MT for the week. Exports of 581,000 MT were down 34% from the previous week and 62% below the four-week average. China was the top destination for U.S. soybean shipments at 262,200 MT.
Wheat: Net sales of 266,700 MT for 2022-23, down 6% from the previous week but up 11% from the four-week average. That was within the range of pre-report estimates from 150,000 to 500,000 MT. China was the lead buyer at 137,000 MT, including 130,000 MT switched from unknown destinations. China was also the lead destination on shipments at 135,000 MT.
USDA reported daily soybean sales of 184,000 MT to unknown destinations for 2022-23.
CORN: May corn futures posted modest corrective gains overnight but appear likely to test key near-term support at last week’s spike low at $6.22 1/4. A close below that level would confirm a downside breakout from the bear flag formation and open sharp downside risk. Near-term resistance is layered from the 5-day moving average at $6.32 3/4 to previous support at $6.48 1/4.
SOYBEANS: May soybean futures continue to trade in a sideways-to-higher range. Near-term support is layered in the $15.21 to $15.12 range where the short-term and intermediate moving averages stand. Near-term resistance is layered from Monday’s high at $15.38 1/2 to the February high at $15.49 3/4.
WHEAT: May SRW wheat futures
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone as traders wait on cash cattle trade to develop. As expected, packers are slow-playing cash cattle negotiations. But with feedlots current and in no hurry to move cattle at steady/weaker prices, packers’ strategy of extending cash negotiations deep into the week hasn’t worked in their favor as cash prices have risen for five consecutive weeks and are expected to be firmer again this week. Choice boxed beef prices dropped $3.15 Wednesday and are down $5.42 from their recent peak at $290.20. While that suggests the wholesale market may have put in a short-term price top, the decline triggered strong retailer interest as packers moved 165 loads of beef on the day, including 121.3 loads of Choice cuts. Strong retailer demand under the market and a seasonal tendency for price strength during spring limit the downside. Beef sales of 5,600 MT for 2023 were a marketing-year low – down 31% from the previous week and 67% below the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone as there are hints traders are becoming a little more eager to buy. The CME lean hog index is up another 20 cents to $79.29 (as of March 7). While the cash index is $7.18 off the late-January low, it’s nearly $20 below last year at this time. The slow climb higher in the cash index is limiting traders’ willingness to build in too much premium for spring- and summer-month hog futures. The pork cutout value firmed 64 cents on Wednesday, though movement slowed to 245 loads, signaling retailers continue to balk at prices when the cutout moves into the upper-$80 range. Net pork sales of 22,100 MT for 2023 dropped 29% from the previous week and were 44% below the four-week average.