Morning Market Update- 3/23/21- Grains Are Mixed to Start Tuesday


Grain markets are a mixed bag with the soy complex firmer while wheat and corn mostly post losses. The star of the show continues to be soybean oil with the May contract up another 1.4% overnight. Soybeans on China’s Dalian Exchange were up 0.37% while soybean meal was down 1.01% and corn was down 0.04%. Mainly weaker trade in global equity indices overnight with U.S. futures indicating a lower open Tuesday morning. Investors are waiting on data on manufacturing and home sales later Tuesday as well as testimony from the heads of the Federal Reserve and Treasury Department regarding the quarterly pandemic-aid CARES Act.

Cattle futures Monday were able to regain some of the loss of last week, but the gains were minimal and hard to come by. The Cattle on Feed report was not friendly enough to spark any major buying interest, but futures were a bit overdone to the downside. It may be difficult for traders to get too bullish about this market unless futures move above last week’s technical support, which is now this week’s resistance. Total beef in cold storage for the month of February was up 3% from February 2020, but down 2% from January. Hopefully stronger boxed beef prices will increase the need for packers to purchase cattle, resulting in higher cash this week. The Commitment of Traders report showed funds were net buyers of 1,900 futures contracts increasing their net long positions to 83,560.

Hog futures struggled for a while Monday and even though some contracts closed lower, they had come back off their lows by quite a bit. Packers remained aggressive with an increase of $2.55 on the National Direct Hog report. Pork is in demand and there is plenty of room in cold storage. The February Cold Storage report showed total pork inventory increasing 7% from January, but inventory is down 24% from a year ago. Technically, June through August futures are flirting with the uptrend line, which is some cause for concern. The Commitment of Traders report showed funds as net buyers of 1,546 contracts, bringing their net-long positions to 75,833.