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GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Corn and soybeans saw modest corrective selling overnight on light volume, while wheat futures consolidated near contract lows. The Labor Department released February employment numbers this morning, the US economy added 275k jobs in February 2024, beating forecasts of 200K and higher than a downwardly revised 229K in January (previously 353K). The unemployment rate ticked up to 3.9%, above expectations of 3.7%, despite strong jobs growth. The mixed bag in jobs data sent the U.S. dollar index around 250 points lower, while front-month crude oil futures saw modest selling pressure.
USDA is expected to make minor adjustments to its U.S. usage forecasts in the Supply & Demand Report at 11:00 a.m. CT, which would lead to slight changes to 2023-24 domestic ending stocks. Analysts expect USDA to project U.S. ending stocks at 2.159 billion bu. for corn (down 13 million bu. from February), 319 million bu. for soybeans (up 4 million bu.), 657 million bu. for wheat (down 1 million bu.) and 2.72 million bales for cotton (down 80,000 bales). A greater focus will be USDA’s changes to South American crop forecasts, especially for Brazil, which will impact global ending stocks.
President Joe Biden’s State of the Union (SOTU) address touched on several key issues for agriculture. Regarding the farm sector, Biden said: “Because of my investments, family farms are better able to stay in the family and children and grandchildren won’t have to leave home to make a living. It’s transformative.” He added, “Because of my investments in the family farm led by my Secretary of Agriculture who knows more about this than anybody I know, were better able to stay on those farms so their children and grandchildren won’t have to leave home, leave home to make a living. It’s transformative.”
The $460 billion package, consisting of six bills, received overwhelming support in the House. The Senate plans to conduct a procedural vote at noon ET today to advance the funding bill. Meanwhile, work is ongoing on the remaining six bills, which include larger and more challenging appropriations measures such as Defense, Labor-HHS-Education and Homeland Security. The Senate aims to address these bills before the March 22 midnight deadline.
This morning, USDA reported cancellations of 110,000 MT of SRW wheat for delivery to China during the 2023-24 marketing year.
CORN: May corn futures saw profit taking overnight. Resistance stands at $4.38 3/4, $4.40 1/2, then the 40-day moving average at $4.43 1/4. Bulls are seeking to hold support at $4.33, the 20-day moving average, which is backed by $4.30, then $4.25.
SOYBEANS: May soybean futures posted modest losses overnight. Bulls are eyeing downtrend line resistance at $11.66, which coincides with the 20-day moving average. Further resistance stands at $11.75 then $11.83 1/2. Support stands at $11.56 3/4, $11.48 1/4, with significant backing from $11.40 3/4.
WHEAT: May SRW futures saw modest corrective buying overnight. Bulls are eyeing resistance at $5.31, which has little backing until $5.46, then the 10-day moving average at $5.51. Meanwhile, support stands at $5.28 1/2, $5.25, then $5.19 3/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, supported by news of cash cattle trading sharply higher in the northern market. Following a slow start to negotiations this week, reports of cash cattle trade starting at $185.00 in the northern market, the highest mark this year, are likely to drive this week’s cash cattle average higher once again. Negotiations remained slim in the Southern Plains, though cash sources expect trade at higher prices there today. Wholesale beef prices continue to improve packer margins, as Choice cutout rose $1.70 to $306.61 and Select firmed $1.17 to $296.26. That marks the highest quote for Choice beef since Oct. 30 of last year.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as technical selling is likely to persist. April futures have struggled to work higher despite continued seasonal gains in the CME lean hog index, which is up another 17 cents to $81.48 today (as of Mar. 6). The premium that April futures hold to the index is just $3.045 as of Thursday’s close. Traders’ skepticism about strong gains in the cash hog market is apparent, leaving futures vulnerable to daily moves in the index, as cash prices are likely to dictate price action in futures in the near future. Wholesale pork prices slipped on Thursday, as cutout fell 34 cents to $91.15, while movement totaled 300.5 loads.