GRAIN CALLS
Corn: 20 to 30 cents higher.
Soybeans: 15 to 20 cents higher in old-crop.
Wheat: 60 to 75 cents higher.
GENERAL COMMENTS: Winter wheat futures surged the daily trading limit and posted record or near-record highs as the Russia/Ukraine war fueled concerns over disruptions to the global grain markets. Corn futures hit contract highs for the fourth day in a row and soybeans also climbed. Malaysian palm oil futures dropped nearly 8% but are still higher for the week, while front-month Nymex crude oil futures rallied around $4. U.S. stock index futures point to lower opens this morning and the U.S. dollar index surged to the highest level since May 2020.
China extended a buying spree in U.S. soybeans that began in late January. USDA reported daily soybean sales of 106,000 MT for delivery to China during the 2021-22 marketing year, along with daily soybean sales of 108,860 MT to Mexico and 125,000 MT to “unknown destinations,” also both for 2021-22. Since Jan. 28, USDA has reported a combined 5.827 MMT of soybean sales to China or unknown destinations, a more than eight-fold increase from the pace over the previous month.
U.S. non-farm payrolls rose a stronger-than-expected 678,000 in February and the unemployment rate fell to 3.8% from 4.0%, though wages grew less than anticipated, the Labor Department reported today. Economists expected a gain of around 467,000 jobs. The numbers reinforce expectations the Federal Reserve will commence a rate-tightening cycle later this month.
The Zaporizhzhia power plant in southeastern Ukraine, Europe’s largest, is operating normally after it was captured by Russian forces in fighting overnight. Ukraine’s foreign ministry said any damage to a storage facility for spent nuclear fuel could release nuclear radiation and called on global leaders to take decisive action. On the ground, Russian troops are encircling Ukraine’s capital Kyiv, while assaults on the southern city of Mariupol continued. Many Black Sea ports remain shut, while some container lines have halted Russian visits.
The Biden administration is considering whether waiving biofuels blending requirements under the Renewable Fuel Standard (RFS) could help fend off food inflation, Reuters reported. An administration official said there is “no serious consideration of this” right now, but given surging food inflation, it was just a matter of time until the food-versus-fuel debate was rekindled. It is not clear any such waiver would impact food prices as it would most likely provide only a psychological impact for prices.
CORN: May corn futures overnight reached a contract high at $7.82 1/2 and are up from $6.55 3/4 at the end of last week. March futures reached $7.87 1/4, the highest for a nearby contract since prices hit $8.00 in July 2013. Corn futures are gaining on spillover from rallying wheat, as well as signs of stepped-up purchases from China and other foreign buyers.
SOYBEANS: May soybeans rose as high as $16.85 1/2 overnight. The most-active contract is up from $15.84 1/2 at the end of last week but failed at chart resistance round $17.00 the previous three sessions, suggesting the market may be establishing a near-term top.
WHEAT: May SRW futures opened overnight trading up the 75-cent daily limit and reached a contract high at $12.09. March SRW touched $13.40, the highest intraday price on record and surpassing the previous high in February 2008. May HRW futures posted a contract high at $12.25 1/4.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-mixed
CATTLE: Live cattle futures may extend this week’s slide to four-month lows on technically-driven fund selling and signs of a cash market top. The escalating Russia/Ukraine war has driven concerns over beef demand and the corn market’s extended rally over $7.00 likely will continue to weigh on feeder futures. Live steers this week averaged $140.48 through yesterday morning, down from last week’s average of $143.22. Choice grade cutout values fell $1.37 yesterday to an 11-month low of $254.35, though movement was strong at 153 loads. April live cattle fell $1.75 yesterday to $138.35, a four-month low and down from $141.925 at the end of last week.
HOGS: Lean hog futures are poised to extend this week’s sideways trade, as firm cash fundamentals mitigate geopolitical worries over demand. The CME lean hog index is down 14 cents today, but seller interest in futures likely will be limited unless traders sense a stronger late-winter pullback is coming. Pork carcass cutout values fell $2.01 yesterday to $106.41, led by a decline of over $33 in bellies. Movement was strong at 360 loads. April lean hog futures fell $1.10 yesterday to $105.20, up from $103.675 at the end of last week.