GRAIN CALLS
Corn: 5 to 7 cents higher.
Soybeans: 12 to 15 cents higher.
Wheat: SRW 5 to 7 cents higher; HRW 11 to 14 cents higher; HRS 10 to 12 cents higher.
GENERAL COMMENTS: Grain and soy markets surged overnight, each would mark a significant reversal if gains are sustained throughout today’s session. Data coming out of China noting that their economy is doing better than expected helped increase risk appetite overnight. Outside markets were mixed overnight, as front-month crude oil futures fell under pressure and the U.S. dollar index traded lower on four-week lows.
China imported 13.04 MMT of soybeans during the first two months of 2024, down 8.8% from the same period last year and the lowest for the period since 2019. China customs also reported revised soybean imports for the first two months of 2023 of 14.3 MMT, down from the initially reported 16.17 MMT. Poor crush margins, the Chinese Lunar New Year and slow customs clearance slowed soybean imports to start 2024, according to Shanghai JC Intelligence Co.
China’s Foreign Minister Wang Yi strongly criticized the U.S. for imposing what he calls “bewildering” trade curbs on China, warning that these actions will ultimately harm America itself. Wang’s remarks come as the Biden administration seeks to restrict China’s access to advanced technology, citing national security concerns. Despite some improvements in tensions between the U.S. and China since a summit between Presidents Xi Jinping and Joe Biden, Wang claims the U.S. has not fulfilled all promises made during that meeting. He also highlighted ongoing issues such as disagreements over Russia’s war in Ukraine and China’s territorial claims over Taiwan. Wang asserts that blocking China from accessing artificial intelligence could have significant consequences and pledged to submit a proposal for international cooperation in this area to the United Nations.
This morning, USDA reported cancellations of 130,000 MT of SRW wheat for delivery to China during 2023-24. Reports of a cancellation in wheat circulated on Wednesday, helping fuel prices to fresh contract lows.
Export sales for the week ended Feb. 29:
Corn: Net sales of 1.110 MMT for 2023-24, up 3% from the previous week and in-line with the four-week average. Increases came primarily for China and Mexico. Sales came in the middle of expectations of 800,000 MT to 1.4 MMT.
Soybeans: Net sales of 613,500 MT for 2023-24, the most since Jan. 11 and up noticeably from the previous week and four-week average. Increases came primarily for Germany and Indonesia. Sales were above expectations from 175,000 to 600,000 MT.
Wheat: Net sales of 271,400 MT for 2023-24, down 17% from the previous week and 16% from the four-week average. Increased came primarily for the Philippines and South Korea. Sales were at the lower end of expectations of 250,000 to 550,000 MT.
CORN: May corn futures surged to a three-week high overnight. Prices are trading above the 20-day moving average for the first time since December. Resistance stands at $4.41 1/2, the 40-day moving average at $4.43 1/2, then $4.50. Bulls are aiming to close prices above the 20-day moving average at $4.32 1/2, with additional support coming into play at $4.28 3/4, then $4.24 3/4.
SOYBEANS: May soybean futures negated the last two days’ losses overnight. Bulls are eyeing resistance at $11.66 1/2, the 20-day moving average, on continued strength. Further resistance stands at $11.77 1/4. Bulls drove prices above the 10-day moving average at $11.54 1/2, which bulls have not closed prices above since January. Additional support stands at $11.45 1/2.
WHEAT: May SRW futures posted corrective gains overnight. Initial resistance stands at $5.46, backed by $5.51, then the 10-day moving average at $5.57 1/2. Bulls are seeking to hold support at $5.31, the contract low of $5.28 1/2, then the psychological $5.25 mark on renewed selling strength.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone as technical support continues to underpin prices. April futures have been consolidating near recent highs for three weeks, building momentum for another leg higher. Packers continue to curb cattle slaughter, with estimated slaughter averaging less than 121,000 head per day through the first three days this week, totaling just 362,000 head. That’s down 10,000 head from last week and 13,614 head from year-ago. Negative margins and tight market-ready supplies are likely to keep a lid on cattle slaughter and support wholesale beef prices. Choice cutout rose 12 cents to $304.91 on Wednesday while Select firmed 22 cents to $295.09. USDA reported net beef sales of 14,000 MT for 2024, up 14% from the previous week but down 10% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, supported by strength in cash fundamentals. After opening lower on Wednesday and facing staunch selling pressure most of the morning, April futured closed nearer session highs. That strength is likely to spillover into today’s session as premiums that April futures hold to the CME lean hog index continue to tighten. The index is up another 44 cents to $81.31 today (as of Mar. 5), making the premium the April contract holds to the index just $3.69, well below the average gain from now until mid-April. Wholesale pork prices rose 6 cents to $91.49 Wednesday, as gains in loins offset a big drop in hams. USDA reported net pork sales of 36,400 MT for 2024, up 12% from the previous week and 9% from the four-week average.