CORN

Corn futures were flat overnight and though trending bearish, are technically oversold which may support yesterday’s reversal action.  After placing a new contract low on Wednesday in the May contract, sellers stepped aside at the $3.00 level and prices moved higher.  First Notice Day is today for the contract with deliveries expected.  Poor demand for ethanol, and thus corn used for production continues to curse the market.  Only 3.759 mil barrels were produced for the week marking the lowest reading since at least February of 2008.  However energy prices are making sizable gains for the week which will improve ethanol’s demand outlook.  Trade estimates for this morning’s USDA Weekly Export Sales are 700,000 to 1.20 mil tons for old crop, 200,000 to 450,000 tons for new crop.

SOYBEANS

Soybean futures were firm overnight on follow-through from the recovery in soybean prices on Wednesday.  May beans got to 8.38 on gains of 6-1/4 cents after ending a 3-day losing streak yesterday.  Nov beans topped out at 8.47-3/4 on gains of 3-1/2 cents.  Export sales will be the key for prices today as Argentina faces supply bottlenecks due to low river levels and Brazil’s currency extends it’s recovery from record low levels.  Expectations are for sales to be 800,000 mil tons to as high as 1.60 mil for combined marketing years.

WHEAT

Wheat futures eased overnight, losing 4 cents in Chi and KC.  Mpls spring wheat contracts were mostly steady.  Global wheat prices softened with improved weather forecasts in Europe bringing the potential for much needed relief from dry conditions.  In southern Russia, conditions will remain dry until next week.  Demand into the end of the marketing year will be the key.  Technical weakness in Chicago keeps pressure on prices and now that prices have dipped below their key, long-term moving averages this week, that market may be poised to test the March low.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 300,000 tons for old crop, 100,000 to 350,000 tons for new crop.

CATTLE

Live cattle futures are expected to see early two-sided trade today with cash trade mostly undeveloped.  Futures look to stay underpinned by strong retail values after choice carcasses rallied more than $40 this week to the $340 level.  The Government’s move to force slaughter plants to re-open is supportive but, demand may still face some headwinds from the record highs in beef prices.  April goes off the board today at a deep discount to cash.  The new lead month June is at 84.275 versus cash at around $100/cwt.

HOGS

Lean hog futures are called mixed to lower after seeing a higher open fail on Wednesday on ideas that the Government’s move to re-open slaughter plants may have created an over-reaction in the market after the recent price recovery had already occurred.  Open interest has been dropping as traders step aside in the wake of high volatility.  Strong retail markets  and firm cash provides support to the market in general.  However, the premium of futures to cash markets make the deferred contracts susceptible to additional long liquidation.  Weekly export sales are likely to stay supportive with strong sales and shipments to China being closely watched.

Author

Kelly Rubisch