GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: SRW 5 to 7 cents lower; HRW 3 to 5 cents lower; HRS 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside overnight though showed increased buying interest into the break. Outside markets shook off increased geopolitical risk overnight as front-month crude oil futures are trading modestly lower and the U.S. dollar index is trading around 120 points lower. Equite markets reversed a significant portion of Friday’s losses overnight.
Iran’s weekend barrage of missiles and drones targeting Israel amid heightened regional tensions fueled by the Gaza conflict has spurred deliberations within Israel’s war cabinet regarding a response. Despite intercepting over 99% of the projectiles, Israel remains resolute in determining the timing and scale of its retaliation. In discussions with international counterparts, President Joe Biden’s national security team emphasized Washington’s stance against participating in offensive actions against Iran. Meanwhile, global leaders have reacted variably, with some openly condemning Tehran’s actions, others advocating for an immediate Gaza ceasefire and almost all urging restraint amid escalating tensions in the Middle East. Overnight market reaction was muted.
Extreme heat that moved into the central U.S. over the weekend will continue during the first half of this week. A cooldown during the second half of the week isn’t expected to be as cold as advertised on Friday. Most crop regions in the U.S. will receive some rains over the next 10 days, according to World Weather Inc., though west-central HRW areas will stay relatively dry.
Analysts expect the National Oilseed Processors Association (NOPA) to report its members crushed 197.8 million bu. of soybeans during March, based on a Reuters poll. That would be a 6.2% increase from February, 6.4% greater than March 2023 and the highest level ever for any month. Soyoil stocks are expected to total 1.792 billion pounds. Of note, the Bloomberg poll pegs March soybean crush at 194.9 million bushels.
USDA reported daily export sales of 165,000 MT of corn for delivery to Mexico. Of the total, 135,000 MT is for delivery during the 2023-24 marketing year with the remaining 30,000 MT for delivery during the 2024-25 marketing year.
CORN: May corn futures continue to struggle garnering bullish momentum below the 40-day moving average. Resistance stands at that mark, currently at $4.37 1/4. Additional buying finds resistance at $4.42. Support stands at $4.31 1/4 then $4.28 3/4. The recent range continues to tighten, which is likely going to continue today.
SOYBEANS: May soybean futures gave up a portion of Friday’s gains overnight. Initial resistance stands at the 10-day moving average, currently at $11.74 1/2, and is backed by resistance at $11.79 3/4. Bulls are seeking to hold support at $11.66 then $11.59 1/4 on continued selling pressure.
WHEAT: May SRW futures saw steady selling pressure overnight. Bulls are seeking to retake initial resistance at $5.51 3/4, which is backed by prior support at $5.55 1/2. Further buying targets the 40-day moving average at $5.61. Support comes in at $5.45 1/4, then $5.38 1/2. The recent breakdown puts SRW futures in a precarious position, as the uptrend from the March lows is broken.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on wholesale beef strength. Wholesale beef prices firmed for the second consecutive day, as Choice cutout jumped $2.20 to $300.57 and Select rose 39 cents to $295.54. Cutout values are showing early signs of stabilizing from recent weakness, which could support price action in futures. The drop in June futures has outpaced the drop in cash cattle prices by a wide margin. While futures have fallen $11.425 over the last three weeks, cash prices have fallen just $3.83 over the same time frame, as of last Thursday. The fundamental situation in the cattle market has not changed, the historically low cattle herd is likely to continue to support cattle futures in the longer term.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on continued strength in cash fundamentals. June lean hogs faced sustained selling pressure late last week, though losses fell shy of 40-day moving average support, which has capped losses in the contract since mid-January. The CME lean hog index is up another 72 cents to $90.56 as of April 11. May futures stand $3.315 above the latest quote for the index. That is well below the average $8.14 rise in the cash index from now until mid-May, when the May contract will be cash settled. Wholesale pork prices remain on recent highs, with cutout falling 9 cents to $101.20, led by big losses in ribs. Movement improved to 307.13 loads, crossing the 300.00 load mark for the first time this week.