CORN

Corn futures are showing some impressive gains today, with May up 13-3/4 to 3.49, Jul up 13 cents to 3.54-3/4, and Dec up 10 cents to 3.67-3/4. Corn futures are catching some of the rebound buying today from the energy market. Crude oil is up over 3.00 currently, trading in Apr about 23.50. While oil prices are still much too cheap to make ethanol production profitable, the bounce does at least provide a short covering opportunity. Until we see an extended recovery in the crude oil markets, it is difficult to expect ethanol demand to remain very strong. Ethanol margins are widening very quickly across the country as profit margins for ethanol production have dropped almost instantaneously. Today’s export sales report showed nearly 905,000 tons of corn sold for the week ending March 12. This was down 39% from last week and down 17% from the previous 4-week average. Jul corn futures opened at their low today, at 3.42-1/2. Prices have since shot higher, returning back within their Bollinger Band range. While prices have overtaken yesterday’s highs, futures have not been able to break through the highs from Tuesday. Stochastics are still giving oversold readings. Speculative funds were thought to have sold about 33,000 contracts of corn yesterday.

SOYBEANS

Soybean markets are also catching a good jump from short-covering this morning, with May beans up 24-1/2 to 8.50, Jul beans up 21-3/4 to 8.54-1/2, and Nov soybeans up 15 cents to 8.57. A bounce in energy prices has helped to lift the soybeans today, especially given the relationship between soybean usage for bio-diesel and oil prices. Reduced ethanol demand may cut the supply of DDGs which in turn could increase demand for soybean meal for feed. The U.S. dollar is sharply higher today which is a pressure point, but the Brazilian real is also higher and is providing at least a bit of reprieve from the stronger U.S. currency. U.S. FOB soybean prices are reported to be competitive with Brazil currently. Jul soybeans are trading at their highest levels today since Monday morning. Nearby resistance comes in at about 8.61-1/4, the 10-day moving average. It would likely take a close above that line to change the trend. The U.S. sold 632,000 tons of soybeans for the week ending March 12, down 25% from the previous week and down 37% from the previous 4-week average. Speculative funds were thought to have bought about 1,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are sharply higher this morning, with May Chi wheat up 25-3/4 to 5.34, May KC wheat up 23 cents to 4.69-1/2, and May spring wheat is up 16 cents to 5.25-1/4. Today’s price action is a bit of a change from action earlier in the week. Before today, the higher premium wheat markets were leading the way higher as a production surge was noted to feed grocery store restocking. There is talk that virus issues may not impact wheat as much as other ag commodities, especially the wheat varieties used for making bread and other consumer goods. However, it is still reasonable to expect a pullback in export activity due to the virus. Global supplies may be a bit tight when it comes to high-quality milling wheat though overall supplies are still plentiful. The U.S. sold about 338,000 tons of wheat for the week ending March 12, down 25% from the previous week and down 21% from the previous 4-week average. May Chi wheat is trading at its highest levels today since February 26 with an impressive jump. Nearby resistance is at the 100-day moving average level at about 5.40. May Chi wheat has already punched through the 10-day moving average resistance level and the 20-day moving average resistance level. May KC wheat has punched through its 20, 100, and 200-day moving average levels. Prices are currently testing the 50-day moving average level as wheat surges to its best values since February 21. May spring wheat is trading at its highest levels today since March 5 after breaking through its 10 and 20-day moving average levels. Stochastics have turned to a buy signal and the trend looks higher. Speculative funds were thought to have bought about 7,000 contracts of Chi wheat yesterday.

CATTLE

Most cattle markets are locked at their limit higher prices today, with Apr, Jun, and Aug all up 3.00 to 95.10, 88.92, and 89.65 respectively. Apr and May feeders are both up 4.50 to 114.12 and 113.02 respectively. Beef values have rallied over 30.00 in just three days, the largest three-day increase in history. This has likely pushed packer margins near all-time highs and should keep the demand for slaughter supplies very strong, at least as long as packer plants are not shut down due to the spread of the virus. With the jump in packer margins, cash trade in the country is beginning to stabilize as well. With production running at a pretty good clip, many are beginning to think that grocers have stocked up on enough beef supplies for the near term which could pressure prices. The U.S. sold 21,200 tons of beef for the week ending March 12, up 20% from the previous week and up 33% from the previous 4-week average. The front-month live cattle futures have stayed limit higher for most of the session though have come off a bit. Jun has only traded as low today as 87.30. Apr feeders have shown similar price action, opening sharply higher, trading as low as 111.62 and have settled in locked at limit higher at 114.12.

HOGS

Hog markets are sharply higher this morning, with Apr up 3.00 to 61.15, Jun up 2.30 to 69.60, and Jul up 2.17 to 72.52. The cash index and pork values are still trending higher lately which is providing good support. The heavy production pace is allowing grocers to keep meat cases stocked, and is also providing supplies ready in case China becomes a major buyer soon. Weekly average weights shifted down this week which is positive and should tighten pork supplies in the near term. Jun hogs opened with triple-digit gains today, but sold off relatively quickly, testing yesterday’s closing prices as support. Prices quickly jumped higher though and are now trading just off the highs of the session. Stochastics are still oversold but prices were able to hold the Bollinger Band support level this morning. The U.S. sold about 36,000 tons of pork for the week ending March 12, down sharply from last week but up sharply from the previous 4-week average.

Author

Carol Tillmann