CORN

Corn futures were firm overnight following a nice technical bounce off support amid short covering in Tuesday’s session.  Prices are challenged by demand concerns which favors the bears.  Today we’ll see how active the ethanol grind is in routine Weekly Ethanol Statistics report which has seen a drop in corn usage with the drop in energy markets.  Crude is up 80 cents this morning, but still mired in a down-trend.  USDA will also release routine monthly Supply/Demand data tomorrow following Weekly Export Sales.  For today, look for choppy, position-squaring activity in corn as traders digest bottoming signals after breaking a streak of seven lower sessions.

SOYBEANS

Soybean futures were up a nickel overnight and remain in consolidation mode at their respective short-term moving averages.  The uneventful price movement mirrors the same stagnant news cycle surrounding global competition for export as Brazil in moving into the final 20% of harvest.  Weakness in soybean meal prices has been a source of price pressure for beans, too, as those contracts test key support levels that is likely to trigger a technical bounce.

WHEAT

Wheat futures were up 5 to 7 cents overnight to stay mid-range of this week’s trading pattern.  USDA reported crop ratings of 62% Good-to-Excellent on the first set of weekly crop ratings.  This was the best ratings at this point since 2010 and not expected by the trade.  Demand needs to stay strong in the last quarter of the marketing year to support prices.  The dollar is up this morning, but saw a sizable pull-back yesterday that supports U.S. wheat exports, particularly in light of other players restricting their exports and France projected to reduce soft wheat acreage to a 17-year low.

CATTLE

Live cattle futures remain in expanded limits today which is becoming the norm.  Contracts are called steady to higher after the strong up-move on Tuesday that will likely stir up more short covering with the perception that the market had become too oversold.  Cash cattle started trading at $105, $4 lower than last week, but still at a strong premium to the April contract, which is sitting at 88.32 and June at 84.80.  Retail values continue their pullback, and are looking for stability.

HOGS

Lean hog futures called mixed.  Limit higher closes on Tuesday offer the potential for additional short covering today.  Futures continue to hold a steep discount to the cash market. Retail values continue to soften and plant closures keep the trade concerned about the lack of space to handle slaughter numbers.  Meanwhile, the rally in the stock market to start the week has many talking about the probability that the situation will turn more normal sooner than anticipated.

Author

Kelly Rubisch