CORN

Corn futures are lower this morning in relatively quiet trade. May corn is down 0.03 to 3.4575, July is down 0.025 to 3.5175 and Dec is down 0.025 to 3.645.  Global risk sentiment is improving, as evidenced by the weakness in the US dollar, making US corn more attractive to import. The Buenos Aires Grain Exchange kept their projection for Argentine production steady at 50mmt. July corn made its first close yesterday above the 10-day moving average resistance level since March 10. July is testing, and so far holding, that same moving average as support this morning. A close back below would be disappoint and would keep the trend sideways to lower. Bearish technicians might point to a potential pennant continuation pattern hinting towards another break lower. Speculative funds were thought to have sold 1,000 contracts of corn yesterday.

SOYBEANS

Soybeans are down slightly this morning in choppy, two-way trade. May beans are down 0.15 to 8.7875, July beans are down 0.015 to 8.8325 and Nov beans are down 0.0175 to 8.7725. China demand is increasing, the US dollar is selling off and Argentina farmers are beginning to hoard soybean supplies as a hedge against economic instability. There is also talk that the Argentina government may shut down ports and elevators for 15 days. July soybeans traded as high this morning as 8.9325 but have since sunk back toward the lows of the day. July futures are a bit overbought, so consolidation at these levels is healthy as long as prices can hold the 20-day moving average support level. Funds were thought to have sold about 3,000 contracts of beans yesterday.

WHEAT

Wheat markets are shoring moderate gains so far today, with May Chi wheat up 0.0525 to 5.745, May KC wheat is up 0.0475 to 4.96 and May MPLS wheat is up 0.025 to 5.425. Wheat futures are finding support today on a proposal from Russia’s ag ministry to set up export quotas to protect domestic food supply. Ukraine bakers are also asking the government to limit exports. Many food staples are wheat-based, and this has help wheat become very resilient in the face of global uncertainty caused by the coronavirus outbreak. Winter wheat contracts surged higher early in the session and tested nearby resistance at the upper Bollinger bands, but prices have pulled back and settled in near the middle of the day’s range. Spring wheat futures also tested resistance at the upper Bollinger band, as well as the 50 and 100-day moving average levels but has since pulled back to the middle of the day’s range.

CATTLE

Cattle markets are sharply lower this morning, under pressure from heavy production and diminished demand. April lives are down 4.02 to 101.42, June lives are down 3.62 to 89.92 and August lives are down 3.17 to 91.30. May feeders are down 3.82 to 121.60 and August feeders are down 3.75 to 127.85. Record packer margins have kept slaughter pace running very fast. This is positive for the cash markets, but has the potential to overwhelm consumer demand, especially given restaurant shutdowns and stay at home orders. Cash cattle has traded as high this week as $120, vs last week’s high of about $112. At some point, April futures will need to converge with the cash market, and futures traders may be pricing in a sharp drop in cash markets into next month. June lives have fallen back below their 10-day moving average level and a close below would be the first since March 19. May feeders have fallen back below their 20-day moving average support level. Momentum in both markets is pointing lower.

HOGS

Hog markets gapped lower this morning and are making new contract lows. April is down 3.02 to 59.87, June is down 4.00 to 64.75 and July is down 3.30 to 67.30. Yesterday’s Hogs and Pigs report was considered slightly bearish, showing higher inventories than expected. Pork values are beginning to pull back from the recent surge and traders are growing concerned that high production will overwhelm demand in the short term. Exports have been strong lately but will need to sustain the momentum to avoid even more burdensome stocks. June hogs are making new lows after gapping lower on the open. Sellers have dried up at the lower Bollinger band support level, but today’s dump does not bode well into the end of the week.

Author

Kelly Rubisch