CORN
Corn futures are finding a solid bounce this morning and are pushing through nearby moving average resistance. May corn is up 0.0725 to 3.1175, July corn is up 0.0625 to 3.21 and Dec corn is up 0.045 to 3.38. Energy prices are higher today providing some outside market support, and the US dollar is trading lower for the fifth session in a row. Corn futures posted bullish key reversals yesterday despite a 4.6% drop in ethanol grind week-over week and a 47.5% drop in ethanol grind from the same week last year, and may be trying to carve out a seasonal low. Planting is going well so far, though the corn crop is far from made. July corn is trading above it’s 10-day moving average resistance level this morning for the first time since March 30. A close above would be a bullish technical development, and the first since March 26. Stochastics are pointing higher but it may be early to call the trend changed. Funds were thought to have bought about 5,000 contracts of corn yesterday.
SOYBEANS
Soybean futures are sharply higher this morning, with May up 0.16 to 8.4775, July is up 0.155 to 8.53 and Nov is up 0.135 to 8.5775. China’s National Grain and Oils Information Center said in a report today that China soybean imports in May could reach 10mmt, a bullish development. The jump in energy prices is supportive today, and there is talk of logistical issues handling soybeans in Argentina. July soybean futures are trading above their 20-day moving average level for the first time since April 13, and a close above would likely trigger some short covering. Stochastics are pointing higher, and prices may be trying to pull out of a seasonal low. Funds were thought to have bought about 4,000 soybean contracts yesterday.
WHEAT
Wheat futures are mixed this morning, with July CHI wheat down 0.0175 to 5.1475, July KC wheat is up 0.0225 to 4.7925 and July MPLS wheat is up 0.015 to 5.09. Sluggish export demand, as well as thoughts of improving crop conditions worldwide are keeping a lid on wheat futures at the moment. The dollar is under pressure again which is supportive for wheat prices, and the jump in energy prices may lend itself to a strengthening Russian ruble. CHI wheat futures sold off hard this morning but have rallied into the upper third of the day’s range. KC wheat tested its lower Bollinger band support this morning, and spring wheat has traded in a choppy, two way range so far. Funds were though to have sold about 6,000 contracts of CHI wheat yesterday.
CATTLE
Cattle markets are mixed to higher this morning, with April lives up 1.30 to 86.90, June lives are up 0.07 to 84.35 and August lives are up 0.05 to 90.82. May feeders are down 0.77 to 117.77 and August feeders are down 0.75 to 127.70. Traders are still unsure how slaughter pace will fare in the coming weeks despite orders for plants to stay open. Massive increases in beef values may limit some demand, which may weigh on prices despite slaughter possibly stabilizing. June cattle are still trading at a wide discount to the cash market, and given hopes for slaughter lines to stay open, this is supportive. June live cattle are trading back above their 10 and 20-day moving average support levels with momentum pointing sideways. May feeders have fallen below nearby support levels and could be curling lower.
HOGS
Hog markets are showing triple digit gains today, with June up 2.45 to 58.02, July is up 1.15 to 59.65 and August is up 1.12 to 62.22. The cash index is sharply higher, and traders appear to be optimistic about slaughter capabilities in the short term. The rally in pork values is certainly incentive for packers to stay open. There may also be growing concern about lower hog numbers later in the year if piglet culling becomes widespread. June hogs are testing their upper Bollinger band resistance level this morning, as stochastics move back toward overbought levels. Hog prices seem vulnerable to a correction lower given the very shaky pork production situation and nearly overbought technicals, but the trend still appears to be higher.
Author
Kelly Rubisch