CORN

Corn futures are moderately lower again today, with May down 4-1/2 to 3.39-1/2, Jul down 4-3/4 to 3.45-1/4, and Dec corn down 2 cents to 3.60-1/2. Crude oil is down nearly 3.00 this morning, with Apr trading near 24.00. This has been the major pressure point on corn lately as ethanol production is expected to slow down due to tightening margins. Today’s U.S. weekly ethanol report should show near-record stocks, but again, production should drop soon. There are reports of ethanol basis levels dropping nearly 25 cents already this week. The market is still trading a massive crop for the 2020 crop year, but the short-term demand changes due to the ethanol situation are the drivers lately. Jul corn futures traded as low this morning as 3.38-1/4, but have since bounced back to near the middle of the day’s range so far. Corn is sharply oversold according to most technical indicators, but there could be more downside, especially given the sharp rally in the U.S. dollar and collapse in energy prices. Speculative funds were thought to have sold about 37,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are finding a bit of a bounce today, with May beans up 5 cents to 8.29-1/4, Jul up 4-1/2 to 8.35-1/2, and Nov beans steady at 8.42-3/4. Even though the U.S. dollar is sharply higher today and the Brazilian real continues to collapse, U.S. soybean prices are beginning to become more and more competitive with Brazilian prices. In addition, there is a lot of confusion about the Argentina export situation. Last but not least, there are reports that China soybean buyers are in contact with U.S. exporters. Brazil and Argentina have both received rain lately, but 6-10 day forecasts remain dry and warm. Jul soybeans made another new low this morning, trading as low as 8.29. This is not much below the lows from Monday and Tuesday of this week and prices have so far recovered back within their Bollinger Band range. Prices are currently trading about halfway up the day’s range so far. Traders will watch today’s close very closely. Lately, mid-session strength has given way to later session buying and disappointing closes. Speculative funds were thought to have bought about 1,000 contracts of soybeans yesterday.

WHEAT

Wheat prices are attracting some impressive stabilization in buying action today. May Chi wheat is up 7-1/2 cents to 5.06-3/4, May KC wheat up 11-3/4 to 4.44, and May spring wheat up 2 cents to 5.11-1/4. South Korea is tendering for nearly 137,000 tons of U.S. wheat this morning which is a major supportive factor. Winter wheat conditions in Texas and Kansas also dropped this week though Oklahoma conditions improved by a total of 9%. The strength of wheat markets today in spite of the sharp rally in the U.S. dollar and a total collapse in the Russian ruble is impressive and very unexpected. Jul Chi wheat traded lower this morning than yesterday’s lows and is currently trading above yesterday’s highs. This would constitute a bullish key reversal if prices can finish with positive gains. May KC wheat is punching through its nearby resistance at the 10-day moving average, and a close above would be the first since February 19. Spring wheat futures are showing positive though less impressive sessions. Prices tested nearby resistance at the 10-day moving average but have since backed off and are still oversold. Speculative funds were thought to have bought about 3,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are mixed this morning in very choppy and two-way trade. Apr lives are up 1.25 to 97.60, Jun lives down 72 to 89.02, and Aug lives down 55 cents to 89.02. Apr feeders are up 1.12 to 112.00 and May feeders are down 35 cents to 111.50. Beef values have rocketed higher in recent sessions, currently trading at their highest levels since mid-November. This is likely due to grocery stores getting their hands on all the beef they possibly can in case the supply chain shuts off due to the spread of coronavirus. Cattle markets have found some support lately from the jump in beef values though it is unclear how the market can sustain these kinds of gains, especially if plants get shut down. At this point, there are no reports of this happening. Jun live cattle traded as high this morning as 94.25. This was well above the highs from Monday’s and Tuesday’s sessions and even close to the 10-day moving average. However, near mid-morning, prices have backed off to slightly negative territory. Apr feeders are trading with solid gains currently, but more importantly, may be attempting to stabilize near these levels. Prices have returned within their Bollinger Band range and Stochastics are turning higher from oversold levels. Still, we do not have a buy signal.

HOGS

Hog markets are choppy this morning, with Apr hogs up 3.77 to 62.25, Jun down 1.02 to 69.40, and Jul down 50 cents to 71.77. The Cash Index is still trending higher and pork values have rallied lately due to retailers securing as much pork inventory as they can in case of future packing plant shutdowns. We are entering a time of year when domestic pork production typically pulls back which is supportive. However, weights are increasing counter-seasonally, and this would only increase if packing plants were to shut down. The best traded Jun hog futures are holding their Bollinger Band support level this morning after falling below earlier today. Stochastics are still oversold and futures are trading about in the middle of the day’s range. While we are not rallying higher, the consolidation is impressive. However, if packing plants do end up shutting down, lower prices are likely in the cards.

Author

Carol Tillmann