GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 5 to 8 cents lower.
Wheat: SRW 4 to 6 cents lower; HRW 2 to 4 cents lower; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Soybeans favored the downside overnight while corn and wheat saw action on either side of unchanged, though saw increased selling pressure into the break. Corn and soybeans are nearing recent lows, marking today’s price action as important. Front-month crude oil futures gave up most of yesterday’s gain overnight while the U.S. dollar index is up over 450 points.
USDA reported daily sales of 130,320 MT of corn and 120,000 MT of soybeans for delivery to unknown destinations — each during the 2024-25 marketing year.
The annual inflation rate in the U.S. edged up to 3% in January, up from 2.9% in December and above expectations. CPI rose 0.5% month-over-month, well above expectations of 0.3%. The bulk of inflation stemmed from increasing shelter costs. Core CPI rose 3.3%, up from 3.2% a month ago and well above expectations of 3.1%. Following hotter than expected CPI, expectations for rate cuts were pushed back to December of this year.
France’s ag ministry lowered its forecast for 2024-25 French wheat exports outside the EU by 100,000 MT to 3.4 MMT. That would be down 67% from 2023-24 and the lowest level in the ministry’s records dating back to 1996-97. The ministry raised its export forecast within the bloc by 100,000 MT to 6.24 MMT, down just 50,000 MT from 2023-24.
As of Feb. 12, Ukraine’s 2024-25 grain exports totaled 26.99 MMT, 1.47 MMT (5.8%) ahead of the same period last year. Exports included 11.34 MT of wheat (up from 9.97 MMT last year), 13.11 MMT of corn (down from 13.82 MMT) and 2.11 MMT of barley (up from 1.47 MMT).
The House Budget Committee, chaired by Rep. Jodey Arrington (R-Texas), may release its budget resolution today — an essential step before a markup planned for Thursday. Arrington’s proposal calls for $4.5 trillion in tax cuts and $1.5 trillion in spending cuts. It assumes a 2.8% economic growth rate and includes $300 billion in mandatory spending increases for border security and defense. This resolution represents a compromise between hardline conservatives pushing for deeper cuts and House leadership seeking balance. Senate Republicans are taking a different approach, opting for a two-bill strategy prioritizing a quick win for President Trump with narrow spending packages. Tensions between House GOP leadership and Arrington have slowed progress, but leadership remains cautiously optimistic that Arrington’s resolution will pass the Budget Committee and eventually the House floor. The next few days will be critical in determining whose strategy prevails.
CORN: March corn futures saw continued selling pressure overnight. Support comes in at $4.76 3/4 then the Feb. 3 low of $4.72 1/2. Resistance stands at $4.83 3/4 then $4.91 1/2 on a bounce.
SOYBEANS: March soybean futures are challenging key support. Bulls are seeking to hold support at the Feb. 3 low of $10.31 3/4. Resistance stands at $10.44 1/2, the 20-day moving average, then the psychological $10.50 mark on a bounce.
WHEAT: March SRW futures continue to struggle garnering much bullish momentum. Continued selling pressure finds support at $5.72 3/4, the 10-day moving average, then $5.66 1/2. Bulls are looking to overcome resistance at $5.83 3/4 then $5.91 1/2 on resurgent strength.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, driven by continued technical selling pressure. April live cattle futures continue to trade in a steep downtrend following the late-January record high. Reports of cash cattle trading around $3.00 lower than last week are also likely to weigh on futures, despite discounts to the cash market. Packers continue to slow production in an effort to manage poor margins and tight supplies, which could limit the amount of cattle trading hands this week. Wholesale beef prices continue to face weakness, with Choice falling $1.04 Tuesday while Select dropped $1.71 to $322.46.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, driven by continued strength in cash fundamentals. April lean hog futures posted a contract high close Tuesday, potentially signaling a technical breakout on the daily bar chart, though followthrough strength is needed to confirm that today. The CME lean hog index continues to work higher, rising another 44 cents to $86.19 as of Feb. 10. Pork cutout rose a dime to $99.72, the highest mark since Nov. 11. Gains in bellies and butts led cutout higher Tuesday.