Morning Market Commentary- 3/9/21- Grains Mixed Ahead of WASDE Report


Grain markets are mixed with wheat, soybeans and oil higher while corn and meal are weaker ahead of the March WASDE. The grain space has been especially erratic lately which could change once the USDA gets their latest prognostications out of the way. We’re not expecting many changes to the balance sheets but even minor changes for the U.S. or South America can have a major impact with how tight the carryout is currently. Soybeans on China’s Dalian Exchange were down 0.09% while soybean meal was down 0.51% and corn was down 1.14%.

Global equity markets are mostly higher overnight with U.S. futures suggesting a strong start to the cash open later Tuesday morning. Investors are still waiting for Congress to actually pass the $1.9 trillion stimulus bill, even though markets have been pricing the event in for weeks. The energy complex is rallying sharply overnight with crude and products up over 1.0%. The U.S. Dollar Index is weaker overnight after having closed higher in four straight sessions.

Strength permeated through the livestock complex Monday with follow-through buying interest in cattle. One would like to say that a bottom has been established and futures will trend back higher again, but that may be wishful thinking. Technically, futures stopped at the 20-day moving average, possibly indicating a level of significant resistance. The market may not be in a position to trend higher if there is no support from higher cash. Of course, we will not know what cash will do until at least midweek.

Hog futures began Monday lower but overcame initial selling pressure to push higher as the day progressed. Prices again closed higher on the National Direct Hog Report, indicating the desire of packers to aggressively purchase hogs. July and later contracts continue to make new highs, which should underpin the market. Front-month April is struggling as it is slowly eroding extra price premium in relation to cash. The higher close Monday should set the stage for follow-through buying.

Farm and Ranch Director Jesse Allen has the latest: