CORN

Corn futures were mostly flat with a weaker tone overnight.  Old crop carryout was less than expected in Tuesday’s USDA WASDE report, and basically unchanged from last month.  Corn futures finished with an improved technical picture and that could lead to additional short covering.  The 2020-21 marketing year projections were slightly less than expected, but ending stocks at 3.318 billion bushels forecast for next year will limit any rallies.  May corn contracts go off the board tomorrow trading at a slight premium to July.  Looking ahead, traders will monitor weather and simmering trade tensions between the U.S. and China.

SOYBEANS

Soybean futures are called mixed to lower after trading softer last night and seeing contracts close below their 40-day moving averages in Tuesday’s session.  Nov beans were down 2 to 8.55.  May and July are about even with each other at 8.50 as May prepares to go off the board.  A 100 million bushel adjustment in export targets left soybean old crop carryout at 580 bushels and above expectations in Tuesday’s USDA report.  This will keep front month prices in check.  Overall projections for soybeans are for very manageable supplies, which should keep the lows in tact overall.

WHEAT

Wheat futures are lower this morning with world wheat supplies forecast to stay heavy amid an additional 18 MMT in world supplies estimated over last year.  In addition, U.S. wheat  2020-21 stockpiles came in 88 million bushels above market expectations at 909 million bushels for the next marketing year, which should keep pressure on prices.  July Chicago wheat was down 4 cents to 5.10-1/2 overnight and may test the low of 5.05-3/4 from May 4.  July KC wheat fell 3-1/2 cents overnight to the contract’s 200-day moving average support at 4.65-3/4.  July Mpls is down 3-1/4 to 5.17-3/4.

CATTLE

Live cattle futures are called steady to higher.  Early indications that improved cash trade should stay supportive for the market and, retail values remain at record levels, will support price and the potential cash market.  USDA made adjustments lower in expected beef production for 2020, which helped push Tuesday’s rally.  Slaughter is picking up with all of us hoping to see a return to normal activity sooner than later.  Live cattle futures will have expanded $4.500 limits today.

HOGS

Lean hog futures are called mixed.  Selling interest evaporated in Tuesday’s trade which ushered in a surge of buying interest and drove prices to higher closes.  USDA cut estimated pork production for the year by 1.6 billion pounds in Tuesday’s WASDE report.  With strong export demand and retail prices, the stronger trade on Tuesday may set up additional follow through, particularly with the discount of futures to cash a friendly market factor.  July is trading above 61.00 with the May contract scheduled to expire tomorrow, currently at 68.00.

Author

Matthew Strelow