Morning Market Report- 3/31/21- Grains Start Higher Ahead of USDA Reports


Grain trade is higher across the board overnight led by soybeans and soybean oil. After risk off trading to start much of the week we are seeing a bit of a rebound overnight ahead of the USDA reports. It will be interesting to see what numbers USDA comes out with at 11am CT today and if there are any surprises that shock our grain markets. Corn prices especially will get their next test later Wednesday when USDA is expected to show 2021 planting intentions of 93.1 million acres (ma) and 7.778 billion bushels (bb) of corn stocks on hand March 1, according to a Dow Jones survey of analysts. The planting intentions typically gets more attention, but it is the corn stocks number that could offer a surprise and may possibly explain the uncommonly strong cash basis we see around the country

China’s Dalian exchange showed May corn down 1.0%, May soybeans down 1.5%, May soybean meal down 0.2% and May soybean oil down 3.1%. July common wheat on China’s Zhengzhou exchange was unchanged. June Malaysian palm oil is trading up 0.6%.

Live cattle futures just could not generate the same strength Tuesday as they did on Monday. It certainly was not because of lower boxed beef prices as they exploded higher. It was because of a disappointed cash trade as nothing happened. It was more technical in nature. June and later contracts could not break through to new highs. Traders may keep the market trading sideways through the rest of the week as they wait for cash, and due to it being a holiday-shortened week. The stiff premium April futures are holding to cash may keep a lid on further upside price potential in the near term, but there still is plenty of time for stronger cash to develop as packers need to purchase cattle and will need to bid up to get them. Feedlots have set their offers quite a bit higher at $118 to $120 in the South and $192 in the North.

Hog futures performed very well Tuesday with June and July contracts making new highs. So far, it has been a good week, technically. Futures contracts closed the chart gaps on Monday and then pushed higher Tuesday. Lower cutouts and cash Tuesday did not deter the bullishness of traders and positive fundamentals of the market. Packers may hold back the rest of the week to get a good handle on supply and demand after the holiday.

Farm and Ranch Director Jesse Allen has the latest: