Morning Market Report- 3/17/21- Grains Weaker to Start Wednesday


Grains are mostly weaker overnight with the exception of old crop soybean oil contracts and May corn. The market is still abuzz about the latest Chinese corn purchase which will keep pressure on the USDA to tighten carryout further. Dalian corn, soybean and soymeal markets were firmer overnight while soybean oil futures were lower. Soybeans on China’s Dalian Exchange were up 0.26% while soybean meal was up 1.4% and corn is was up 0.30%. Flat to weaker equity markets overnight as investors await the latest Federal Reserve guidance later Wednesday afternoon. Energy markets are weaker overnight, led by RBOB gasoline futures which are down over 1.0%. The U.S. Dollar Index is weaker overnight while metals are firmer.

Cattle futures did not accomplish much in the way of market direction Tuesday. It did, however, indicate that the market is supported. Futures did not fall back after the surge higher on Monday. In fact, August and later live cattle contracts posted new highs. It was a bit disappointing that futures could not receive any spillover strength from hogs. Rather than traders buying into cattle due to the strength of hogs, they bought directly into the hog market. Some asking prices in the South have been thrown out to the market $3.00 higher than last week, but little else was seen to provide any indication of price potential. The determining factor this week will be whether cash will trade higher.

Hogs have the attention of traders as no other commodity is showing similar strength. June and July futures closing above $1.00 per pound is a psychological milestone and a gift that was not anticipated late last year. The August contract is knocking on the door of the same level. Packers still do not have enough purchased and are not slowing down in their aggressiveness. The market is realizing the hogs are not out there, nor will they be, for much of the rest of the year. Strong domestic demand coupled with strong export demand may make this a market to behold as the year progresses. The surge of futures Tuesday should have some follow-through strength Wednesday.