CORN
Corn prices are drifting lower again this morning, with May down $0.035 to $3.40, July is down $0.04 to $3.455 and Dec is down $0.04 to $3.605. Traders are still struggling to price in the loss in ethanol demand lately. Reports that ethanol demand has all but shut off in some areas is due to the sharp sell off in energy prices. Crude oil is trading at its lowest levels since 2002. Meanwhile, China corn imports for the Jan-Feb time frame were up 64.7% from a year ago. July corn has stayed within a relatively tight range this morning compared to recent volatility. July traded as high as $3.50 and as low as $3.44. Stochastics are still oversold, and their trajectory towards a bullish crossover has flattened rather quickly. Speculative funds were thought to have sold about 3,000 contracts of corn yesterday.
SOYBEANS
Soybean futures are correcting this morning from the recent surge, with bear-spreading leading the way lower. May beans are down $0.08 to $8.765, July beans are down $0.0625 to $8.7925 and November soybeans are down just $0.015 to $8.71. Heat and dryness in South America is supportive, along with the uncertainty regarding Brazilian and Argentinian shipping logistics. However, the Brazilian dockworkers union voted yesterday to call off their strike. July soybeans have rallied over $0.50 from the recent lows, so today’s setback may be nothing more than a healthy correction. July briefly traded below its 20-day moving average support level but has since bounced back above. A close above that support level, especially after a successful test, would likely keep the trend higher. Speculative funds were thought to have bought about 12,000 contracts yesterday.
WHEAT
Wheat markets are a bit soft this morning, finding some corrective selling action after recent rallies. May Chi wheat is down $0.0525 to $5.5725, May KC wheat is down $0.05 to $4.845 and May MPLS wheat is down $0.02 ¼ to $5.28. The US dollar has made a sharp turn lower which is supportive. The Russian government has started to limit exports of various grains lately as well. Taiwan is tendering to buy 99,450 tonnes of wheat from the US today. Most of today’s selling action appears to be technical in nature. Both winter wheat markets rallied above their Bollinger band ranges yesterday. Both varieties have tried to correct back within those ranges today but are currently holding the upper band as support. Meanwhile, spring wheat futures are consolidating within their recent ranges. Speculative funds were thought to have bought about 12,00 contracts of Chi wheat yesterday.
CATTLE
Most cattle markets are locked at their limit-high prices today. April, June and August lives are all $4.50 higher to $106.15, $97.02 and $98.25 respectively. April and May feeders are up $6.75 to $130.07and $129.50 respectively. Beef values have rallied over $42 over the past seven sessions. Packer margins are setting new records, so we should see cash trade follow the trend higher. There is a growing feeling that packing plants will be more resistant to shutdowns than initially expected, and this should give traders more confidence that demand for slaughter supplies will remain strong. Both the live and feeder markets opened limit-higher this morning and have not traded off. March feeders are trading $3.42 higher to $128.65 and the CME has raised daily limits to $10.00 through contract expiration.
HOGS
Hog markets are showing solid gains today in a gap-higher session. April is up $2.30 to 66.87, June is up 1.97 to 72.95 and July is up 1.77 to 74.80. Carcass cutout values are at their highest levels since mid-November and Chinese imports of pork supplies have surged this year despite the coronavirus outbreak. Packers margins are increasing quickly which is contributing to surging production against the normal seasonal tendency. This has kept demand for slaughter supplies strong but may contribute to heavy stocks down the road. June hogs gapped higher this morning above their 10-day moving average resistance level. A close above this resistance would be the first since March 11th and should turn the trend higher. Stochastics are currently making a bullish crossover higher.
Author
Kelly Rubisch