GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: Steady to 2 cents lower.
Wheat: SRW 4 to 6 cents higher; HRW 12 to 14 cents higher; HRS 8 to 10 cents higher.
GENERAL COMMENTS: Wheat led strength overnight with corn following to the upside, while soybeans saw relative weakness. Core CPI was reported at 3.8% this morning by the Bureau of Labor Statistics, matching a month ago but above expectations of 3.7%. Inflation came in higher than expectations for the third consecutive month, which sent risk assets spiraling lower this morning as the market favored a risk-off tone, which could pressure commodities on the open. Front-month crude oil futures continue to consolidate off monthly highs, while the U.S. dollar index is over 700 points higher on higher interest rates.
Ukraine has shipped 360,000 MT of corn and 65,000 MT of wheat to China so far this month, according to Spike Brokers. The export data firm says a total of 600,000 MT of Ukrainian corn could be shipped to China this month, with another 400,000 MT of corn likely to be exported in May.
Russia has seized companies belonging to agricultural firm AgroTerra and placed them under temporary management, according to a decree signed by President Vladimir Putin. Monday’s decree listed AgroTerra assets being placed under temporary management of Rosimushchestvo, Russia’s federal property management agency. The company, which is a producer and supplier of mass commodity crops and specialty, value-added crops to top food processors, said it was operating as usual and that its primary focus was the ongoing planting campaign.
Ratings agency Fitch revised China’s sovereign credit rating to negative on Tuesday, citing increasing risks to the country’s public finance outlook. Fitch forecasts the general government deficit would rise to 7.1% of GDP in 2024 from 5.8% in 2023. While it lowered its outlook, indicating a downgrade is possible over the medium term, the agency affirmed China’s IDR rating at “A+” – its third highest category. The outlook downgrade follows a similar move by Moody’s in December. China’s government said the rating failed to reflect the “positive role of fiscal policies in promoting economic growth.”
USDA reported daily export sales of 254,000 MT of soybeans for delivery to unknown destinations for the 2024-25 marketing year.
CORN: May corn futures followed wheat higher overnight. Bulls are seeking to overcome initial resistance at $4.34 1/2 before tackling stiffer resistance at the 40-day moving average, currently at $4.38. A resurgence of selling pressure finds support at $4.31 1/4. Significant backing comes from the April 2 close of $4.26 1/2.
SOYBEANS: May soybean futures traded higher most of the overnight session, though faced selling pressure this morning as markets favored a risk-off tone. Bulls are seeking to overcome resistance at $11.80 3/4, which is backed by the 40-day moving average at $11.84 1/4. Support comes in at $11.72, which is backed by $11.67 1/2.
WHEAT: May SRW futures showed relative strength overnight. Gains were largely capped by 40-day moving average resistance overnight, which currently stands at $5.62 3/4. Additional buying finds resistance at $5.67 1/4, then $5.70 1/4. Bulls are seeking to hold support at $5.57 3/4 then $5.51 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone as technical selling is likely to persist. While futures have shown strength the last couple of days, prices remain within Friday’s range and recent buying efforts suggest little more than profit taking. More strong corrective gains and a high-range close for the week are needed to suggest a low is in place. Cash cattle trade has had a slow start to the week at steady to firmer prices, though volume was light. Wholesale beef prices ended Thursday mixed, as Choice cutout rose 2 cents to $302.09 and Select fell 37 cents to $299.90, bringing the Choice/Select spread to a tight $2.19. Both are near the psychological $300.00 mark, which has historically acted as a significant level.
HOGS: Lean hog futures are expected to open with a firmer tone, though profit taking could limit gains after the open as prices are becoming technically overbought. Strength in cash fundamentals has fueled the recent rally, particularly strength in the CME lean hog index. The index is up another 83 cents to $87.88 as of April 8. The index has risen an average of 68.25 cents in the last four days, accelerating the seasonal climb. April lean hog futures maintain a $2.72 premium over the index, implying traders do not expect cash market gains to slow down in the near term. Wholesale pork prices ended Tuesday higher, with cutout rising 38 cents to $100.71.