CORN

Corn futures are finding a bit of a recovery bounce today with May corn up 5-3/4 to 3.78-1/2, Jul is up 4-3/4 to 3.79-3/4 and Dec is up 4-3/4 to 3.81. Traders were covering some shorts this morning ahead of today’s Supply and Demand report. The report was a dud. USDA estimated US 2019/20 corn carryout near 1,892 mil bu vs 1,888 expected and 1,892 in Feb. World ending stocks came out near 297.3 mmt vs 297.2 expected and 296.8 in Feb. Dry weather in Brazil and Argentina are supportive as well with forecasts showing more heat and dryness here than is beneficial. Corn futures have moved back above their 10-day moving average level. A close above the 20-day moving average at 3.82-1/2 would be a supportive technical development though Jul corn has only done this once since late January. Speculative funds were thought to have sold about 8,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are trading with impressive gains so far this morning rebounding from yesterday’s losses and finding a bit of support on quieter volatility today. May soybeans are up 13 cents to 8.83, Jul beans are up 12-1/2 to 8.91-1/2 and Nov beans are up 11-3/4 to 8.98. Today’s USDA report estimated US 2019/20 soybean carryout near 425 mil bu vs 426 expected and 425 in Feb.USDA estimated World 2019/20 soybean carryout near 102.4 mmt vs 99.3 expected and 98.8 in Feb. The Brazilian Real is trading higher today though has not made a technical reversal. The market is expecting lower soybean exports due to reduced economic activity related to coronavirus. There were also reports that China may attempt to rework the phase 1 trade deal due to the impact of coronavirus. Jul soybeans have traded just one tick above yesterday’s highs. Buyers do not seem to have quite enough determination to fill gaps at this point, but the stabilization is at least impressive. Speculative funds were thought to have sold about 16,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are choppy to slightly higher this morning with May Chi wheat up 3-1/4 cents to 5.22, May KC wheat is up a penny to 4.42 and May spring wheat is up 1/4 of a cent to 5.21. Today’s Supply and Demand report estimated US 2019/20 wheat carryout near 940 mil bu vs 944 expected and 940 in Feb. USDA estimated world 2019/20 wheat carryout near 287.1 mmt vs 288.4 expected and 288.0 in Feb. The coronavirus outbreak is negative for most markets, but it may give a demand boost to non-perishable items such as noodles and pasta which could provide some underlying support. A sharp selloff in the dollar lately has been supportive to wheat, but the 9% decline in the Russian Ruble may offset that. More downside in the crude oil markets will further weaken the Russian currency. May Chi wheat briefly tested overhead resistance this morning at the 10-day moving average, but has since backed off. May KC wheat is trading steady with yesterday’s prices, making no major moves and May spring wheat tested and failed to break through nearby resistance at the 10-day moving average. Speculative funds were thought to have sold about 6,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are trading with impressive triple digit gains so far today with Apr lives up 2.85 to 105.70, Jun lives are up 2.80 to 99.90 and Aug lives are up 2.42 to 100.50. Apr feeders are up 3.32 to 128.87 and May feeders are up 3.02 to 129.67. The stock market is higher today which is providing a good measure of support to the cattle markets, however, stocks are only up 250 points at the time of this writing, while the highs of the day so far have been as much as 1,100 points above yesterday’s highs. If stocks turn lower, it seems likely that cattle will face more pressure. Beef values have been choppy lately and the 5-year average price has been moving lower for the past few weeks. Many traders are fearing that beef pipelines could clog up quickly on further economic instability. Apr live cattle have filled the gap from yesterday, but are trading within a relatively quiet range so far. Apr feeder cattle jumped sharply higher on today’s open and traded up to gains of nearly 6.00, but have since backed off to near the lows of the day so far.

HOGS

Hog markets are showing impressive buying today with Apr hogs up 2.30 to 65.30, Jun hogs are up 2.50 to 79.85 and Jul hogs are up 2.55 to 80.85. The stock market is positive so far today which is providing some support to the hog markets even though pork is not nearly as reliant on economic strength as beef. If coronavirus is getting under control in China then we could see some major purchases of U.S. pork. The best traded Apr lean hog contract opened above its 10 and 20-day moving average resistance level and has so far held the 20-day moving average level throughout the session. A close above would be a positive technical development and could turn momentum back higher. Jun and Jul hogs tested their 20-day moving average levels this morning, but have not been able to sustain above them.

Author

Kelly Rubisch