GRAIN CALLS
Corn: 7 to 10 cents lower.
Soybeans: 7 to 10 cents lower.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside in the overnight session, though buying interest in wheat picked up into the break. The market remains keyed in on newswires as trade concerns continues to drive price action. Outside markets saw an uptick in volatility this morning following the CPI report. Front-month crude oil futures are up around a buck on corrective buying while the U.S. dollar index is up around 200 points.
The Bureau of Labor Statistics released February CPI numbers this morning. The consumer price index (CPI) rose less than expected in February, rising 0.2% month over month, well below 0.5% in January and below expectations of a 0.3% gain. That marked annual inflation at 2.8% in February, down from 3.0% in January and below expectations of 2.9%. Core inflation, which excludes volatile food and energy costs, rose 3.1% year over year in February, below expectations of 3.3%.
President Donald Trump imposed 25% tariffs on steel and aluminum imports, impacting all global suppliers. The European Union launched “swift and proportionate countermeasures,” planning to impose its own duties on up to €26 billion ($28.3 billion) worth of American goods, including poultry, beef, some seafood, nuts, eggs, sugar, vegetables and other goods. The EU action will involve two steps: On April 1, the European Commission will reintroduce what it calls “rebalancing measures,” which the EU had from 2018 and 2020 but were suspended under the Biden administration. On April 13, additional duties will target 18 billion euros ($19.6 billion) in U.S. exports to the bloc. Major Asian producers including South Korea, Taiwan, Japan and Australia held off on retaliating. The UK said it would focus on “rapidly negotiating a wider economic agreement.” China’s foreign ministry said it will take all necessary measures to safeguard its rights and interests, noting the U.S. move violated World Trade Organization rules. Ontario Premier Doug Ford held a call with Commerce Secretary Howard Lutnick on Tuesday, during which they agreed to scrap a Canadian electricity surcharge in exchange for a U.S. relaxation of the steel and aluminum tariffs.
Canada could impose non-tariff measures such as restricting its oil exports to the U.S. or levying duties on U.S. imports if the trade dispute escalates further, Canada’s energy minister Jonathan Wilkinson said. “When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than that,” Wilkinson said in an interview with Reuters. “Everything is on the table.” Wilkinson said Canada is considering imposing tariffs on U.S. ethanol as part of a second tranche of trade penalties if Trump continues to escalate the trade war, noting ethanol is “absolutely on the list of things” that could face tariffs.
The House passed a funding bill to avert an end-of-week government shutdown, clearing the continuing resolution (CR) in a largely party-line vote, with just one Democrat — Rep. Jared Golden (D-Maine) — bucking his party’s leaders to back the measure. Rep. Thomas Massie (R-Ky.) was the lone GOP “no” vote. It now heads to the Senate where it will need 60 votes to pass. Sen. Rand Paul (R-Kentucky) is the only Republican not expected to support the bill. The unknown is whether eight Democrats will cross the aisle to approve the bill. If the Senate can’t pass the stopgap prior to midnight Friday, when current funding expires, the government is likely to shut down.
CORN: May corn futures led overnight weakness. Tentative support comes in at $4.60 1/4 while continued selling targets support at $4.56 3/4. Resistance comes in at $4.67 3/4 then the 10-day moving average at $4.70 1/2 on a bounce.
SOYBEANS: May soybean futures continue to see relative weakness. Support lies at the psychological $10.00 mark then the March 4 low of $9.91. Resistance comes in at $10.11 3/4 then the 10-day moving average at $10.19 1/4.
WHEAT: May SRW futures saw continued weakness overnight. Bulls are looking to hold prices above psychological $5.50 support, which is reinforced by support at $5.44 1/2. Resistance comes in at $5.59, the 10-day moving average, then $5.66 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, supported by strength in cutout, though escalating trade concerns may limit buyer interest. After spending the latter half of February chopping near $315.00, Choice cutout has strengthened, rising $3.62 to $321.20 on Tuesday, the highest quote since Feb. 11. Rising cutout has helped boost packer margins, though they remain deep in the red. Cash cattle trade remains slow so far this week with little to no trade taking place. Packers are likely hesitant to raise bids while feedlots are holding out for higher prices given last week’s reversal in the cash market.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, supported by discounts to the cash market, though escalating trade concerns may limit buyer interest. The CME lean hog index is down a penny to $89.70 as of March 10, marking the fifth consecutive daily decline, though the index has fallen just 50 cents over that period. Pork cutout continues to struggle to break above the $100.00 mark, which is keeping pressure the cash index. Cutout fell 64 cents to $97.58 Tuesday, led by weakness in bellies. While prices were down, movement increased to 362.95 loads, indicating strong demand under the market.