CORN

Corn futures are trading lower this morning under pressure from nearly all financial markets. May corn is down 7-3/4 cents to 3.66-3/4, Jul is down 7-1/2 to 3.69 and Dec corn is down 6 to 3.71. Overall economic fears, as well as a cheap Brazilian real and rallying dollar, are keeping corn on the defensive. Ethanol production for the week ending March 6th was down 3.24% from the previous week, but up 3.88% from last year. Lower crude prices are likely to impact ethanol demand moving forward. The U.S. sold 1.47 mmt of corn for the week ending March 5th, sharply above last week. Dry corn futures have pushed to new contract lows this morning. Momentum indicators are pointing lower and more downside price action is likely. Speculative funds were thought to have sold about 7,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are down hard this morning with May down 15-1/2 cents to 8.57-3/4, Jul is down 16-1/2 cents to 8.64 and Nov is down 17-1/2 cents to 8.69-1/4. Brazilian soybean and soybean meal prices were higher this morning, but the real sold off sharply this morning and the dollar has rallied back to its highest levels since March 2. Weekly export sales for the week ending March 5 were reported this morning at 303,000 tons, a marketing year low. This missed expectations by nearly 70,000 tons. Jul soybeans have pushed to new lows this morning and trading as low as 8.59. Prices are oversold according to stochastics and Bollinger bands, but momentum is still pointing lower and more downside price action seems likely. Speculative funds were thought to have sold about 6,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are down hard this morning with May Chi wheat down 10 cents to 5.02-3/4, May KC wheat is down 5-1/4 to 4.30-1/4 and May spring wheat is down 5-1/4 to 5.06-3/4. Wheat markets are finding overflow selling from other commodity markets, in addition to the exchange rate between the U.S. dollar and Russian ruble. Recent pressure in crude markets has sent the ruble lower making Russian exports even more attractive to world buyer. Forecasts for the U.S. Plains through the end of the month are showing greater than normal precipitation, which is also bearish. The U.S. sold 452,000 tons of wheat for the week ending March 5th, coming in near the middle of their range of trade estimates. May Chi wheat is trading at its lowest levels today since late September with momentum still pointing lower. May KC wheat is at its lowest level since early October this morning and May spring wheat is pushing into new lows. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are limit down in both the live and feeder pits with Apr lives at 100.07, Jun at 94.25 and Aug at 93.67. Apr feeders are at 119.02 and May feeders are at 120.75. The stock market is currently down 8.5% on the day, and with cattle markets and equities tied so closely lately, it is no surprise to see cattle markets locked at limit lower prices. There are also questions about retail beef demand moving forward as more and more large events and gatherings are canceled to combat the spread of coronavirus. The U.S. sold nearly d18,000 tons of beef for the week ending March 5th, up 38% from last week and up 11% from the previous 4-week average. Front month live cattle futures are trading at their lowest levels today since September 2019. Front month feeder cattle are trading at their lowest levels today since December 2010.

HOGS

Hog markets are trading limit down all the way out to August. Apr hogs are at 60.87, Jun is at 75.80 and Jul is at 77.00. The cash index and pork cutout values have held together relatively well despite the market uncertainty lately. With the stock market down so hard and large social events being canceled, many are expecting that retail pork demand will decline and pipeline could clog of relatively quickly. Export sales this week was another big bearish factor with net cancellations of nearly 27,000 tons reported for the week ending March 5th. However, actual export shipments of nearly 45,000 tons for this same week were a marketing year high were up 2% from last week and 4% from the previous 4-week average. Mexico received over 16,000 tons of that total. Apr hogs are pushing into new lows this morning, though Jun and Jul were not able to reach new lows with the 3.00 daily limit. Prices have not been locked limit lower all day which suggests that some traders are still seeing the current market as a buy.

Author

Kelly Rubisch