CORN

Corn futures are drifting lower this morning retaking much of yesterday’s gains. May corn is down 2-1/2 cents to 3.75, Jul is down 2-3/4 to 3.76-3/4 and Dec is down 2 cents to 3.78-1/2. Yesterday’s USDA Supply and Demand report was essentially neutral. World stocks to usage ratio did increase a tiny amount and the U.S. balance sheet was unchanged. U.S. Ag Secretary Purdue said that China is still showing full intentions in meeting phase 1 purchase targets, though markets today seem to be bothered by the lower stock market. Jul corn futures have fallen back below their 10-day moving average level. Yesterday’s close above this line was positive yesterday, so giving it back today would be disappointing. Stochastics and other momentum indicators are pointing sideways to lower. Speculative funds were thought to have bought about 10,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are moderately higher this morning with May up 3-1/2 to 3.79-3/4, Jul is up 3-1/4 to 8.87-1/2 and Nov beans are up 2-1/4 to 8.93-3/4. Yesterday’s Supply and Demand report showed the biggest changes for the soybean market with the global stocks to usage ratio increasing by .44%. The U.S. balance sheet was unchanged from February. Heat in dryness in parts of Brazil and Argentina are still supportive, and forecasts for the next 10 days are showing more of the same. The Brazilian real was higher yesterday and may be trying to stabilize again today which is also supportive. The lower stock market today and shaky market feel in general are pressure points limiting gains. Yesterday’s technical price action was supporting as well with closes well off of the day’s highs. Jul soybeans are trading near the middle of the day’s range, but are so far within yesterday’s trading range. Momentum is pointing sideways to lower. Speculative funds were thought to have about 7,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are lower this morning after some tests of nearby resistance. May Chi wheat is down 7-1/2 cents to 5.14-3/4, May KC wheat is down 3-1/4 to 4.41-1/2 and May spring wheat to 4.41-1/2 and May spring wheat is down 3-1/4 to 5.15-1/2. Yesterday’s Supply and Demand report was slightly supportive for the wheat markets with the global stocks to usage ratio decreasing slightly from last month. The Russian ruble is sharply lower this week with the oil price wars which will make Russian wheat exports much more affordable on world export markets. The U.S. dollar is down today, but the declines in teh ruble are much sharper. May Chi wheat tested its 10-day mvoing average resistance level today, but has failed and is now trading at the lows of the day. A break below yesterday’s lows would likely open up another 9 cents of downside. May KC wheat traded higher this morning, but is now on the lows of the day as well, and May KC wheat is testing recent lows from March 9. Stochastics are oversold in all three markets. Speculative funds were thought to have bought about 3,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are mixed to lower this morning with Apr lives up 50 cents to 105.95, Jun lives are unchanged at 99.52 and Aug lives are down 67 cents to 99.00. Apr feeders are down 70 cents to 127.25 and May feeders are down 1.27 to 128.47. Cash trade this week is already down 2.00 to 3.00 from last week, but Apr lives are still trading at a discount to the cash market of over 4.00. This could provide some support if the cash markets can stabilize. Beef values have been choppy lately and not reflecting the futures downtrend for the most part. Average weights are increasing in a counter seasonal trend which could further contribute to a beef pipeline backup. Jun live cattle have made an outside session today, but have not gone much of anywhere. If Jun lives close lower, this could technically be considered a bearish key reversal. Apr feeders are also trading in tight ranges, but are still sharply oversold.

HOGS

Hog markets are mixed to mostly lower this morning with Apr down 65 cents to 64.35, Jun is down 25 cents to 79.05, and Jul hogs are up 12 cents to 80.12. The cash index and carcass cutout values have been trending higher lately, and seasonal trends tell us that domestic production should be able to pull back soon. In fact, yesterday’s USDA Supply and Demand report showed that the USDA is looking for the biggest drop in production from quarter 1 to quarter 2 on record for that time frame. Still, we haven’t seen China buy much pork lately and this is keeping buying interest relatively limited. Apr hogs are trading back below their 20-day moving average level. Yesterday’s jump above, successful test and close above, was very supportive, so today’s price action is disappointing. Jun and Jul are having much more quiet session, mostly unchanged from yesterday’s trades.z

Author

Kelly Rubisch