GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: Winter wheat 8 to 10 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Soybeans led strength overnight while corn saw corrective buying from a fresh contract low. Wheat futures saw renewed selling. Price action ahead of today’s reports is likely to be largely positioning. Outside markets were mixed overnight as front-month crude oil futures continue to retrace last week’s losses and the U.S. dollar rallied on higher interest rates, currently around 350 points higher.
Traders anticipate slightly smaller U.S. ending stocks for corn and wheat and a rise in carryover for soybeans in USDA’s Supply & Demand Report at 11:00 a.m. CT. The average pre-report estimates peg ending stocks at 2.146 billion bu. for corn (2.162 billion bu. in January), 284 million bu. for soybeans (268 million bu.) and 647 million bu. for wheat (648 million bu.). A greater focus will be placed on USDA’s South American production forecasts, especially for Brazil. While USDA is expected to trim its Brazilian soybean and corn crop forecasts, they will likely remain above those from private crop watchers.
Brazilian crop estimating agency Conab cut Brazil’s soybean crop forecast 5.9 MMT from last month to 149.4 MMT. Conab lowered its corn crop forecast 3.9 MMT to 113.7 MMT, with 3.1 MMT of the decline due to a smaller outlook for safrinha production. February is the first month Conab incorporates field observations into its safrinha corn crop forecast. Conab now expects year-over-year declines of 3.4% for soybeans and 13.8% for corn from last year’s record production for both crops. Given the smaller production estimates, Conab reduced its 2023-24 export projections by 4.3 MMT for soybeans to 94.2 MMT and by 3 MMT for corn to 32 MMT.
Export sales for the week ended Feb. 1:
Corn: Net sales of 1.219 MMT for 2023-24, up 1% from the previous week and 25% from the four-week average. Increases came primarily for unknown destinations, Japan and Mexico. Sales came in the upper end of expectations of 600,000 MT to 1.3 MMT.
Soybeans: Net sales of 340,800 MT for 2023-24, up noticeably from last week’s abysmal sales, but down 24% from the four-week average. Increases came primarily for China and Mexico. Sales fell short of expectations of 400,000 MT to 1.0 MMT.
Wheat: Net sales of 378,400 MT for 2023-24, up 17% from the previous week but down 6% from the four-week average. Increases came primarily for South Korea, the Philippines and Mexico. Traders expected sales between 275,000 and 550,000 MT.
USDA reported daily sales of 200,000 MT of corn for delivery to Colombia for the 2023-24 marketing year.
CORN: March corn futures scored a fresh contract low overnight. Initial resistance stands at $4.36 1/2 with backing from $4.38 3/4 then the 10-day moving average at $4.41 1/2. Meanwhile, bulls are seeking to hold support at $4.32 then the psychological $4.25 mark.
SOYBEANS: March soybean futures saw corrective buying following Wednesday’s for-the-move low. Bulls are seeking to overcome resistance at $11.99 1/2, which is backed by the 10-day moving average at $12.02 3/4. Further buying targets $12.18. Support stands at $11.88 1/2 then $11.82.
WHEAT: March SRW futures gave up all of Wednesday’s gains overnight. Bulls are seeking to overcome resistance at $5.97 3/4, the psychological $6.00 mark, then $6.02 1/4 on resurgent strength. Support stands at $5.90 3/4 then $5.84.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though some additional profit-taking after the open is possible. Cash cattle trade has yet to take place this week as feedlots continue to hold out for higher packer bids, encouraged by this week’s surge in futures. Packers have been reluctant to raise bids as their margins have turned red as cash cattle prices have surged for three consecutive weeks and wholesale beef prices sunk from their Jan. 23 peak above $300.00 in Choice. Wholesale beef prices have rebounded after falling to $293.08 on Feb. 2, as Choice has firmed $1.90 in the past three days, including a 91-cent gain on Wednesday. Select cutout rose back above the $285.00 mark, firming 82 cents to $285.42. USDA reported net beef sales of 20,600 MT for 2024.
HOGS: Lean hog futures are expected to open with a mostly weaker tone following Wednesday’s failed upside push. Bulls attempted to bounce prices off 20-day moving average support on Wednesday, traded nearly $2.00 higher intraday, yet closed lower on the session. Nearby technical support could limit selling pressure, though waning cash fundamentals could limit buying interest as well. The CME lean hog index is up just 16 cents to $74.02 (as of Feb. 6), the smallest gain since Jan. 12. Wholesale pork prices have faced heavy pressure this week, falling another $2.24 to $83.99 on Wednesday, as packers discount prices to move product after recent big slaughters. USDA reported net pork sales of 39,200 MT for 2024.