CBOT Grain Futures Calls:
March corn called 2 to 5 cents lower.
March soybeans called 3 to 7 cents lower.
March CBOT wheat called 1 to 4 cents lower.
US dollar is down 9. April crude is up $.08 at $38. Dow is up 62.
Economic Information:
Conference Board Consumer Confidence index is expected at 35.5 for February. That would be lower than the 37.7 January estimate.
OPEC compliance in January, with announced production cuts, was better than expected at 89%. Another supply cut announcement expected in March.
Fed Chairman, Ben Bernanke, to give a policy report to congress later today.
President Obama to give fiscal year 2010 budget to a joint session of congress later today.
Weather:
Dry weather is forecast in Argentina all this week and weekend. Next shot of rain could be .35 to 1.00 inch in the first half of next week.
Grain Market Influences:
Sovereign wealth funds, the investment arms of foreign nations, are sitting on $4 trillion in assets and may look to increase their exposure to commodities from the current small .5%.
Corn summary… Outside markets are still a negative for corn. Another steep loss in the Dow pressured crude. For corn fundamentals we also had a slightly negative weekly export inspection report. 26.4 million bushels of corn were inspected last week which was below estimates of 30 to 35 million as well as last week’s 34.5 million figure.
South Africa is expected to give its first estimate of this year’s corn crop at 11.08 million metric tonnes. That would be down from last year’s 12.7 mmt crop.
Overnight Israel announced they are seeking 32,000 tonnes of corn. Origin could come from either the US, South America, or Europe. Traders expect either Argentina or Brazil to get the deal.
Soybean summary… For South America the current question is whether their short term strike is simply for attention or whether they will dig in their heels, like last year, for an extended period. The strike is set to end tomorrow and farmers will be meeting with a government official. For weather, Argentina is currently a neutral issue. They received rains in the past three days but now have dry conditions forecast through this weekend. On the bear side soybeans, like corn, are still looking at a bearish economy. That pressures energy prices and therefore soybean oil prices. The 1000 am weekly export inspections release was bearish.
Overnight there is no new news regarding Argentina’s strike. In other news, Taiwan announced they are seeking 40,000 to 60,000 tonnes of soybeans. Origin could either be US or South American.
Wheat summary… This market is still taking its cues from soybeans. We were also reminded today that US wheat is in the back seat regarding world wheat exports. Egypt bought 240,000 tonnes of wheat, all from Russia. We reported last week that Russia would supply some of the shortfall in Argentine production that Brazil depends on. That now makes is Russia and Canada supplying Brazil with little chance for US product. We are not all gloom and doom here though. Today the Canadian Wheat Board released some larger than expected declines for both Canadian and US 2009 production. They estimate Canadian production would fall by 16% this year and for the US to fall 15%.
Overnight export sales reports show South Korea bought 22,000 tonnes of US wheat. Japan announced they are seeking 22,300 tonnes of food wheat.
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Livestock Comments:
Wholesale beef closes up $.14 for choice and up $.25 for select.
Pork carcass cutout closes down $.81.
Cash hogs are called steady to 50 cents lower.
Livestock Market Influencers:
Weekly pork production fell below last year from November straight into the first week of February. During that time it was around 2% to 3% under last year. Those declines were made strictly on lower Canadian imports. We will not see lower US born numbers until March or April. In the past two weeks pork production was 2.4% and .1% higher respectively. An unexpected bounce in production, at the same time as we just lost one slaughter plant, could explain some of the pressure. In other news Monday’s higher CME prices were made on a very small 17,505 contracts.
It is interesting to see cattle do pretty well today. The stock market pushed to new lows for its downtrend today. Live cattle futures closed higher and the afternoon boxed beef report showed gains for both choice and select. Last week’s beef production totaled 483 million lbs. In six or seven weeks we will see it dip down to 470 or so. That will be happening at the same time barbeque demand is starting to be procured. In today’s beef market is almost blasphemy to talk about better demand, especially when the stock market is still tanking. Is it possible? In other news volume on Monday’s higher trade fell to 29,541 contracts.
Livestock Futures:
April Lean Hogs are called steady to 10 lower. Chart support 5700 and resistance 5985.
April Live Cattle futures called 20 to 50 lower. Chart support 8250 and resistance 8475.
March Feeder Cattle futures are called 10 to 40 lower. Chart support 8825 and resistance 9280.