CORN

Corn futures are moderately higher this morning, with May up 3 cents to 3.48-1/2, Jul up 3-1/4 to 3.54-1/4, and Dec corn up 4-1/2 cents to 3.67-1/2. Some dryness concerns in Brazil are supportive, and some are also concerned about excess moisture in the U.S. lately. These trends will need to continue to provide long-lasting support, but they are topics of consideration. News of expanding livestock production in China is supportive, and China bought 756,000 tons of corn today from the U.S. The export situation in Argentina is still the source of much confusion, which is ultimately supportive. Jul corn shot higher this morning on the 8:30 open, trading as high as 3.60-3/4. Prices have since backed off in a bit of a disappointing mid-morning, though prices have settled in with at least moderate gains. Indicators are still giving oversold readings. Speculative funds were thought to have bought about 21,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are trading with impressive double-digit gains again today, with May up 15 cents to 8.58-1/4, Jul up 13-3/4 to 8.61-3/4, and Nov up 15-3/4 to 8.64-1/4. Weekly soybean stocks in China have dropped sharply to their lowest level since at least 2010, and news yesterday that China bought soybeans from the U.S. was very supportive. Palm oil was up sharply overnight, and China meal futures were up 2.5% overnight. Soybean meal has been the strongest member of the soy complex this week due to ideas that reduced ethanol production would cut DDG supplies, which in turn could boost demand for soybean meal. The U.S. dollar is down today and the real is up which is also making U.S. beans more competitive on the export front. Jul soybeans are trading above their 10-day moving average resistance level for the first time today since March 6. A close above would be the first since March 4 and would be a very positive technical development. Nearby resistance would then jump to 8.81, opening up another 20 cents or so of upside. Speculative funds were thought to have bought about 13,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are showing impressive gains again today, following through on yesterday’s positivity. May Chi wheat is up 7 cents to 5.42, May KC wheat up 9-1/4 to 4.74-3/4, and May Mpls wheat up 5 cents to 5.24-3/4. Wheat markets are still finding support from a surge in demand for high protein wheat supplies used for making food products. News yesterday that China bought at least two cargoes of hard red winter wheat from the U.S. was very supportive. South Korea also bought 136,000 tons of milling wheat from the U.S. this week. Wheat markets have rallied so far this week with a higher U.S. dollar, so the pullback in the dollar today is yet another bullish factor. May Chi wheat is trading at its highest levels today since February 24. Prices have tested their 50-day moving average level today and a close above would be the first since February 20. May KC wheat is trading above its 50-day moving average level and a close above would be the first since February 19. May spring wheat tested its overhead 20-day moving average resistance level yesterday but couldn’t close above it. Currently, prices are back above that level and a close above would be the first since January 22. Speculative funds were thought to have bought about 14,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are trading sharply higher again, benefitting from huge packer margins and a strong demand for slaughter supplies. Apr live cattle are up 4.25 to 99.52, Jun lives up 1.90 to 90.80, and Aug lives up 2.57 to 92.22. Apr feeders are up 4.40 to 118.52 and May feeders are up 4.85 to 117.87. Dressed steer weights are still increasing against the normal seasonal tendencies which can inflate production totals, but right now, the cattle markets are only focused on production chain speed. Beef values are at their highest levels since June 2017 in a massive rally so far this week. Cash trade so far this week has stabilized in the $110-$113 range vs the 5-area average last week of around $106. Jun live cattle gapped sharply higher this morning, opening just below their 10-day moving average resistance level. Prices briefly traded above that resistance level but have since backed off and are holding in gains of about 2.00 for the day. Apr feeders also gapped sharply higher, but have been able to hold their place above the 10-day moving average resistance level. A close above would be the first since February 21.

HOGS

Hog markets are trading with impressive gains so far today, with Apr up 2.25 to 63.40, Jun up 1.12 to 70.27, and Jul is up 1.02 to 73.47. Carcass cutout values have rallied this week to their highest levels since late January and the cash index has trended higher as well. Export sales this week were solid, making their third-highest total of the year so far. Carcass weights are beginning to trend lower along with the normal seasonal trend which is beneficial in keeping production levels down and news that China released 20,000 tons of pork from state reserves overnight was also supportive. Jun live cattle are currently testing the high end of the week’s trading range. While prices have kept within a relatively tight range today, the stabilization action in light of volatility in other markets is no doubt impressive and speaks to how cheap hogs are at these levels.

Author

Carol Tillmann