GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 3 to 8 cents higher.
Wheat: SRW steady to 2 cents higher; HRW and HRS 4 to 8 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat traded higher on corrective buying overnight. A rebound in crude oil futures will be supportive, but the U.S. dollar index is pushed more than 250 points higher following the stronger-than-expected jobs data for April.
The pace of shipments from Ukraine via the Black Sea grain deal has slowed amid concerns ships could be stalled if a deal is not renewed, Reuters reported, citing to sources and shipping data. The number of ships coming in to pick up cargoes has dropped this week to two vessels per day from three to four ships on average daily in the past three weeks, data from the joint coordination center showed. There are currently 107 forward grain orders for ships in the market, with 94 for May and only a few orders for the forward months, Shipfix data showed.
Russia cut its wheat export tax for May 12-16 to 5,279.2 ($68.53) rubles per metric ton based on an indicative price of $279.70. That’s down from a rate of 5,573.2 rubles per metric ton the previous week and the lowest since the first week of April.
China received its first cargo of corn from South Africa this week, Xinhua News reported. A 53,000-MT cargo was purchased by state-owned grain trader COFCO and will be sold to domestic feed makers. Between March 25 and April 14, 108,104 MT of corn shipments left South African ports destined for China.
World Weather Inc. says all areas of the Plains and Midwest will receive some rains over the next two weeks. The northeastern Plains and upper Midwest will see scattered rains during the weekend. Another storm system will moving in during the middle of next week. Southern areas of these regions will likely see the lightest rainfall.
Non-farm payrolls increased 253,000 in April, which was up from a downwardly revised figure of 248,000 in March and much higher than the 180,000 economists expected. The unemployment rate ticked down to 3.4%. Average hourly earnings increased 4.4% over the past year.
CORN: July corn futures pushed above the 10-day moving average overnight. Next resistance is previous support at $5.97 and then the psychological $6.00 level. Near-term support is the 5-day moving average at $5.87.
SOYBEANS: July soybean futures pushed above the 5- and 10-day moving averages overnight. Next resistance is at this week’s spike high of $14.40. Near-term support extends from $14.20 to this week’s spike low at $13.92 1/4.
WHEAT: July HRW wheat futures extended this week’s corrective rebound and pushed above the psychological $8.00 level overnight. Near-term resistance is in the $8.16 1/2 to $8.22 1/2 range, where the 20-, 40- and 50-day moving averages stand. Near-term support extends from $8.00 to $7.77 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone, though we wouldn’t be surprised to see traders attempt to push futures higher ahead of the weekend after sharp losses earlier this week. Futures continue to hold big discounts to the cash market. While cash prices have dropped for three straight weeks following the all-time high, traders’ attitudes are overly pessimistic given supply fundamentals. Choice boxed beef prices firmed 43 cents on Thursday while Select rose 37 cents and movement picked up to 129 loads. Though Choice beef has slipped $1.92 from its recent high, the market is holding up well considering the Choice beef/pork cutout ratio remains high at 3.9.
HOGS: Lean hog futures are expected to open with a mixed tone, though the market is due for some corrective trade. Traders have actively narrowed premiums to the cash market this week. While the cash index is firming, futures have faced persistent pressure. We expect to see some corrective buying surface in hog futures ahead of the weekend. The CME lean hog index rose another 46 cents, marking gains in six of the last eight days. Today’s quote of $74.24 (as of May 3) is $3.06 off the April low and the highest since the first trading day last month. The pork cutout value firmed a nickel on Thursday, but prices are struggling to pull away from the low-$80 range despite being cheap compared to beef.