GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: SRW 1 to 3 cents lower; HRW 3 to 5 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside in overnight trade, continuing recent weakness. Grains have largely diverged from outside markets the past couple of weeks. Front-month crude oil futures are modestly higher this morning while the U.S. dollar index is around 250 points lower.
President Donald Trump is preparing a two-stage tariff strategy that could begin as early as April 2, according to the Financial Times (FT). The plan reportedly includes the immediate imposition of tariffs as high as 50%, particularly targeting car imports. Citing lawyers and individuals familiar with the discussions, FT reports Trump’s team is also weighing the use of Section 301 trade investigations to scrutinize foreign trading practices. In addition, they are exploring the potential use of Section 122 of the Trade Act of 1974, which permits temporary tariffs of up to 15% in response to balance-of-payments issues.
President Donald Trump’s plan to levy fees on China-linked vessels will hurt domestic ship operators, seaports, exporters and jobs, industry executives said at U.S. Trade Representative (USTR) hearings on Monday. The Trump administration says the fees would curb China’s growing commercial and military dominance on the high seas and promote domestically built vessels. “National interest will not be served if the effort to boost American shipbuilding unintentionally destroys American-owned carriers,” said Edward Gonzalez, CEO of Florida-based Seaboard Marine, the largest U.S.-owned international ocean cargo carrier. U.S. vessel operators said the fees on Chinese-linked vessels also would push more U.S. cargo to foreign-owned ocean shipping companies that have resources to better weather the change.
South American crop consultant Dr. Michael Cordonnier lowered his Brazilian soybean and corn production forecasts 1 MMT each to 169 MMT and 122 MMT, respectively, noting dryness in far southern growing areas. For soybeans, Cordonnier says yields in Rio Grande do Sul are lower than expected. For corn, areas in need of rain to pollinate and fill properly represent about half of safrinha production – and the forecast for April through June calls for below-normal rainfall. There are also indications farmers may have switched some intended safrinha corn acres to other crops. Cordonnier maintained his Argentine production forecasts at 48 MMT for soybeans and 46 MMT for corn.
CORN: May corn futures broke below the 10-day moving average overnight. That mark stands as initial resistance now at $4.61 1/4 and is reinforced by resistance at $4.68 1/2. Support comes in at $4.58 3/4 then $4.55 on continued selling pressure.
SOYBEANS: May soybean futures continue to undergo selling pressure. Psychological $10.00 support capped losses overnight, while additional selling eyes the March 4 low of $9.91. Resistance stands at $10.10 1/2, the 10-day moving average.
WHEAT: May SRW futures saw additional selling pressure overnight. Additional selling finds support at $5.44 then the March 4 for-the-move low close at $5.36 3/4. Bulls are eyeing resistance at the psychological $5.50 mark then the 10-day moving average at $5.56 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone in a continuation of Monday’s low-range close, though steep discounts to the cash market could limit losses after the open. Recently, technical and fundamental momentum has diverged, as the cash cattle market has shown impressive strength, surging to record highs last week. Packers continue to operate with margins deep into the red, likely to push trade deep into the week again. Wholesale beef showed impressive strength Monday, as Choice cutout climbed $1.65 to $327.10 while Select rose $3.96 to $313.58
HOGS: Lean hog futures are expected to open with a mostly firmer tone, supported by technical buying as prices have entered the support zone that has limited the downside since early March, though recent weakness in the cash market could continue to weigh on prices. The CME lean hog index continues to inch lower, falling 9 cents to $88.79 as of March 21. April futures continue to trade at a hefty discount to the cash market, which could spur corrective strength today. Pork cutout rose 51 cents to $97.37 Tuesday, led by strength in ribs and picnics.