CORN

Corn futures stabilized with most markets overnight after getting hit rather hard to begin the week. Contracts were down fractionally, though, as of 5 AM this morning. Though the cases of coronavirus in China appear to be slowing, the fact that it is now showing up in many more places around the world is alarming the marketplace and weighing on price support. Since consolidating in a tight range since the beginning of the year, corn futures are now probing for price discovery to the downside at a time of year when rallies are generally absent, at least until spring. The hit seen in the energy markets are seen as a source of further price risk amid waning demand for corn for ethanol.

SOYBEANS

Soybean futures traded two-sided overnight and are now deemed technically oversold, which could support a rebound if something friendly to the market occurs. Prices are getting cheap, given that the carryout is nearly half of what it was a year ago. Coronavirus is the biggest issue for commodities. However, Brazil is expected by many in the trade to produce a record high soybean crop this year.  Meal prices were steady overnight after posting a new contract low on Monday.

WHEAT

Wheat futures traded mixed overnight with Chi wheat down 2 to 3 and KC steady. Yesterday’s poor technical showing, tied to growing concern that coronavirus is pushing into Europe and elsewhere will continue to weigh on the market. In addition, USDA said that some trade forecasts for Russia’s 2020-21 wheat production are as high as 87 mil tons which would be a 17% increase over this season’s output.

CATTLE

Cattle futures are called to lower as the market absorbs additional coronavirus concerns. There is no sign of a market low as short-term selling hits the cattle complex. The next downside objective for Apr live cattle is 114.70. On Monday afternoon, National Ag Statistics Service (NASS), released cold storage data that probably won’t help matters. Beef in storage was pegged up 2% from a month ago. Boxed beef prices fell in January and exports were slow.

HOGS

Hog futures are called weaker after sharp losses yesterday of more than 2.00 on the front months. The premium of futures to cash weighs on futures, as well as a negatively construed Cold Storage report. NASS, Agricultural Statistics Board said frozen pork supplies were up 8% from the previous month and up 11% from last year. Stocks of pork bellies rose 6% from last month and 32% from last year.

Author

Carol Tillmann