Ahead of the Open | May 2, 2024

Grain and soy futures are expected to open solidly higher on followthrough from overnight price strength.

Pro Farmer's Ahead of the Open
Pro Farmer’s Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 3 to 5 cents higher.

Soybeans: 8 to 15 cents higher.

Wheat: SRW 5 to 8 cents higher; HRW 8 to 12 cents higher; and HRS 5 to 8 cents higher.

GENERAL COMMENTS: Grain and soy futures traded solidly higher overnight and are posed to continue that price strength early this morning. Outside markets are mildly supportive, with crude oil modestly higher and the U.S. dollar index around 150 points lower.

Rains continue to fall across the central U.S., resulting in planting delays. Forecasts call for the wet pattern to persist for the next week to 10 days, according to World Weather Inc.

Waves of heavy rain will occur in Rio Grande do Sul and Santa Catarina, Brazil, far northeastern Argentina and extreme southwestern Paraguay into Saturday producing an additional threat of damaging floods. Meanwhile, center-west, center-south and northeastern Brazil will continue to dry out for a while and temperatures will be quite warm, stressing safrinha corn.

Areas from eastern Ukraine to western Kazakhstan will experience net drying, although southern most parts of Russia’s Southern Region and some areas to the north will get at least some rain.

Ukrainian exports of wheat and corn are likely to fall by nearly 25% in 2024-25 due to expected smaller production due to reduced plantings. Wheat exports could fall to 14 MMT from 18 MMT in the current marketing year, while corn shipments may decline to the 20 MMT to 21 MMT range from 27 MMT this year. Barley exports are expected to hold steady at around 3 MMT.

Export sales for the week ended April 25:

Corn: Net sales of 758,500 MT for 2023-24, down 42% from the previous week and 1% below the four-week average. Net sales of 33,700 MT for 2024-25. Traders expected 650,000 MT to 1.3 MMT for 2023-24 and 0 to 300,000 MT for 2024-25. Exports of 1.382 MMT fell 19% from the previous week and were 14% below the four-week average.

Soybeans: Net sales of 414,000 MT for 2023-24, up 96% from the previous week and 45% above the four-week average. Net sales of 7,000 MT for 2024-25. Traders expected 100,000 to 700,000 MT for 2023-24 and 0 to 200,000 MT for 2024-25. Exports of 269,100 MT, a marketing-year low.

Wheat: Net sales reductions of 20,300 metric tons (MT) for 2023-24 and net sales of 406,900 MT for 2024-25. Traders expected (100,000) to 100,000 MT for 2023-24 and 200,000 to 600,000 MT for 2024-25. Exports of 508,600 MT were down 11% from the previous week and 8% from the four-week average.

CORN: July corn futures rose to the highest level since March 28 during the overnight session. The contract is trading above the short-term and intermediate moving averages. Next resistance is the March high at $4.60, which lines up with the 100-day moving average, making it a key level.

SOYBEANS: July soybean futures pushed above the 5-, 10-, and 20-day moving averages overnight, strengthening the technical posture though the short-term trend remains choppy. Next resistance stands at the 50- and 40-day averages at $11.83 1/2 and $11.90, respectively. That’s followed by the April 24 high at $11.91 3/4.

WHEAT: July SRW futures remain within the short-term range from Wednesday’s low at $5.93 1/2 and last week’s high at $6.33 1/4. Bulls have the slight technical upper hand but would need a push above the top of that range to strengthen the grip.

LIVESTOCK CALLS

CATTLE: Choppy/higher.

HOGS: Lower.

CATTLE: Live cattle futures and feeders are expected to with a mostly firmer tone on corrective buying after Wednesday’s late selloff. Concerns USDA’s testing of ground beef from states with confirmed H5N1 cases in dairy cattle could impact consumer beef demand have weighed heavily on the market this week. USDA late Wednesday announced all gold-standard tests for H5N1 in ground beef samples came back negative for the virus, so logic would indicate prices should rebound. But the market still faces weak cash fundamentals as wholesale beef prices fell 83 cents for Choice and $1.88 for Select yesterday, though movement surged to 186 loads. USDA reported net beef sales of 22,500 MT for 2024, a marketing-year high and up 48% from the previous week.

HOGS: Lean hog futures are expected to open under pressure after sharp losses and low-range closes on Wednesday. Given an uptick in the cash hog index after the recent slide, it wouldn’t surprise us if buyers surfaced under the market on a weaker open. The CME lean hog index is up 34 cents to $90.60 as of April 30, ending a four-day slide. After sharp losses on Wednesday, the premium in May lean hog futures narrowed to $2.425 while June hogs finished $9.825 above today’s cash quote. Pork cutout dropped 77 cents yesterday, fueled mostly by a $10.61 decline in primal bellies. USDA reported net pork sales of 33,600 MT for 2024, up 17% from the previous week and 6% above the four-week average.