CORN

Corn futures stabilized overnight from their free-fall to consecutive contract lows.  Contracts were up 2 cents ahead of today’s Weekly Ethanol Statistics data that is expected to show corn usage nearly half of the normal 100,000 bushels ground on a weekly basis to make ethanol now that nearly half of the plants across the country are either shut down, or scaled back on production due to the drop in energy prices and demand for gasoline.  The technical picture is bearish and oversold due to long liquidation and the growth of short selling.  Front Month May did test the 2016 low at 3.01 on Tuesday, which could be a key support level near-term.  December corn, the benchmark for the 2020 crop is at 3.33-1/2 after tumbling to a contract low of 3.25-1/2 on Tuesday.  In outside markets, the dollar is off slightly after hitting a two-week high, June crude is the new lead month and appears headed in the same direction the May contract ended, near zero; And, stock index futures are up 250 points following two down days.

SOYBEANS

Soybean futures, meal and oil were all firm overnight.  After posting a new contract low of 8.08-1/4 on Tuesday, the front month (May) soybean futures contract traded higher, led by a turn in soybean meal values and is now at 8.34.  Both markets are oversold and have room to bounce technically, with the improved chart structure on the daily charts. Nov beans were up 3 to 8.51, but remain entrenched in a down-trend below all of the contract’s moving averages.

WHEAT

Wheat futures continued to struggle overnight, losing 5 cents in the July Chi contract to 5.41-3/4.  July KC was down 6 cents to 4.98, pressured by overall weakness in the corn market spilling over and a general risk-off mood among wheat traders.  A 5% drop in crop ratings to 57% Goof-to-excellent for the U.S. winter wheat crop and dryness concerns in Europe and Black sea region offers support, but overall demand for U.S. wheat amid a two-week rally in the dollar yesterday is a resounding concern that is limiting rallies against global competition.  Mpls wheat was mixed overnight after sliding to a five-week low.  All three markets have neutralized any upward momentum that was established last month.

CATTLE

Live cattle futures are called mixed.  Despite the strong surge in retail carcass values, the concern about cash markets and outside markets may limit rallies.  Early cash is trending steady with last week, but not enough to establish a trend.  More cash clarity is likely to develop with the Fed Cattle exchange market later this morning.  Meanwhile, the announced closure of one of Canada’s largest beef plants reduces Canada’s processing capacity by one third, thus adding to the chaotic challenges that face the supply and demand balance in the northern hemisphere.

HOGS

Lean hog futures are called steady to firmer.  Processing plant closures headline the hog market concerns about the handling of the large supply of slaughter-ready hogs.  These animals cannot simply be put out to pasture like cattle.  Retail carcass value strength is the buying support in the hog markets as carcasses finished  higher in afternoon trade.  Charts are oversold and could be poised for buying strength if fundamentals stay supportive.

Author

Lisa Heder