GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 2 to 4 cents lower.
Wheat: Winter wheat steady to 2 cents higher; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Corn and wheat traded in narrow ranges near unchanged most of the night, while soybeans showed modest weakness. Options for May futures expire today, which could lead to suppressed volatility as the session goes on. The core PCE price index, the Federal Reserve’s preferred inflation gauge, rose by 2.8% from the previous year in March, steady from a month ago at the lowest mark since March 2021, though above market forecasts of 2.6%. Outside markets favored a risk-on tone following inflation numbers this morning, despite implications that interest rates could stay higher for longer. Front-month crude oil futures are continuing this week’s rebound from Monday’s low, while the U.S. dollar index is also trading higher, up around 120 points.
According to the World Bank, the sharp drop in commodity prices has ended, reducing the deflationary impact they had on global economies. With geopolitical tensions and sustained demand, especially for industrial metals crucial to the energy transition, prices have stabilized, potentially keeping interest rates higher than anticipated. The pause in falling prices poses challenges for central banks aiming to curb above-target inflation and reduces their ability to lower interest rates. The situation is reminiscent of post-2008 crisis trends, signaling a “new era” where high commodity prices coincide with slowing global growth. Copper prices are expected to rise due to its importance in electric vehicle production and power grid upgrades, while energy investments are driving demand, keeping prices elevated. Middle Eastern tensions could further increase gold and oil costs.
The Japanese yen fell to a new 34-year low against the U.S. dollar after the Bank of Japan (BOJ) made no change in monetary policy. BOJ left its short-term interest rate target at 0% to 0.1% and made small upward adjustments in its inflation forecast. The yen’s 9.7% drop against the dollar this year is the largest fall of the G10 currencies, driven mostly by the wide gap between U.S. and Japanese government bond yields, which is more than 375 basis points for the 10-year benchmarks.
The bulk carrier Balsa 94, bearing the Panama flag, is headed for Saint John, Canada, with two more vessels, including a vehicle carrier bound for Panama, following its lead. This marks a key development in the restoration efforts as crews have been working to clear the debris from the harbor’s entrance. The Balsa 94’s journey, flanked by tugboats and passing the site of the collapse, signals the beginning of traffic resumption through this critical port, known for processing a high volume of cars and farm equipment. The temporary channel will close shortly for further salvage operations before a scheduled reopening next month to restore the usual flow of maritime traffic.
Flooding in the western and central Corn and Soybean Belt is still expected into early next week and poor drying conditions will limit fieldwork through much of the week next week, World Weather Inc. notes. Colder weather in Argentina will be closely watched, as frost and a few light freezes may evolve in the far south.
CORN: May corn futures traded in a tight range near unchanged overnight. Bulls are seeking to overcome initial resistance at $4.43, which is backed by the March 28 high of $4.48. Initial support stands at $4.37 3/4, quickly backed by the 40-day moving average at $4.37, then $4.35.
SOYBEANS: May soybean futures led weakness overnight. Initial resistance stands at $11.65 1/4, the 20-day moving average, which is backed by the 40-day moving average at $11.75 1/4. Bulls are seeking to hold support at $11.50, with backing from $11.45, then $11.34 1/4.
WHEAT: May SRW futures saw modest weakness overnight, as has been the norm this week. Initial resistance stems from yesterday’s for-the-move high of $6.05, which is backed by resistance at $6.15 1/2, then the 200-day moving average at $6.19. Support comes in at $5.94 1/2, $5.91, then the 100-day moving average at $5.82 3/4.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open higher, in a continuation of Thursday’s strength. Cattle futures posted technical reversals on Thursday, rallying on news of packers paying up to $2.00 higher prices for cash cattle in the northern market. Strong gains today and a bullish weekly high close would be a bullish signal for cattle futures and indicate an interim low is likely in place. Prices were also supported by a greater-than-average reduction in beef supplies as noted in Wednesday’s Cold Storage Report, which indicated beef demand has remained robust. Wholesale beef prices were mixed on Thursday, as Choice cutout rose $1.18 to $296.92 and Select slipped 76 cents to $289.66.
HOGS: Lean hog futures are expected to start the day lower as traders actively reduce premiums to the CME lean hog index. The CME lean hog index is down 22 cents to $91.43 as of April 24. With the index down three out of the last five days, there is some concern current premiums in futures may have become too steep. That will likely lead to followthrough selling from yesterday’s rout, though at this juncture a sustained downturn does not seem likely. Wholesale pork prices were modestly higher Thursday, rising 22 cents to $97.49. Ribs led gains, while bellies have remained at a steep discount from the last couple of weeks.