CORN

Corn futures were firm overnight after trading lower on Monday and keeping the negative effects of COVID-19 alive.  The funds are short this market  and selling pressure is likely to hang around in the near-term as demand for corn continues to shrink amid ethanol plant closures.  Even those plants running on a limited basis are only taking as few as one to two loads of corn per day.  June crude, the new lead month contract is softening, too.  Corn planting progress is pegged at 27% complete, according to USDA, up 15% from last year and up 7% from the 5-year average of 20%.  The trade was looking for around 22%.  This is a good indication that the 2020 crop will be off to a strong start.  Export tender activity included South Korea feed groups buying 133,000 tons of S. American and optional-origin corn.

SOYBEANS

Soybean futures saw modest strength overnight before slipping back toward Monday’s settlement prices.  Soybean planting progress is at 8%, up 6% from last year and up 4% from the 5-year average of 4%, as this year’s soybean crop gets off to a good start.  Improved Chinese export business with the USDA report sales of soybeans to China at the end of last week creates market optimism.  In addition, the spread between the Brazilian real and the dollar is seeing some back peddling after dropping to a record low against the dollar last week.  China’s soybean imports, which were down 13% on the year in March, are expected to rise in the coming month as delivery issues from Brazil are resolved and more soybeans are shipped from the U.S.

WHEAT

Wheat futures were unchanged overnight and are called mixed for today as the trade sorts out headline news.  Global wheat prices softened with improved weather forecasts in Europe bringing potential for much need rainfall and now there is talk that Russia will export more wheat this season than expected after reaching their second quarter export quota of 7 million tons.  U.S. winter wheat crop ratings are at 54% Good-to-Excellent, down 3% last week which should offer some buying support; And, Saudi’s Grain Organization did purchase as much as 715,000 tons of option-origin wheat supplies.

CATTLE

Live cattle futures are called steady to higher based on the strong close yesterday setting the market up for additional follow through, but June cattle, at 84.05 will need to sustain strength once it again trades above the contract’s downward-sloping 20-day MA at 84.70.  The contract continues to hold a deep discount to $99/cwt cash market values.  The choice carcass retail value has broken the $300 level on tight supplies due to the slow slaughter pace.  Slaughter house closures and slowdowns continue to drain the market of bullish forces, however, the record high beef price is viewed as an incentive to resolve the situation sooner than later.

HOGS

Lean hog futures are called steady to higher after closing the 375 point limit higher in the front 4 months on Monday setting the stage for expanded limits today.  This was the fifth consecutive gain for the nearby May contract. Despite processing plant closures fueling concerns about handling the large supply of slaughter-ready hogs, strong retail markets and firm cash provides support to the market in general.  June hogs start the day at 55.275 with the next area of resistance around 56.675 and 57.40.

Author

Kelly Rubisch