Corn – Funds buy 88K, weekly exports slowed but still at a moderate level, March still underpriced
↑ Funds were buyers of 88K, now long 110K or 26% of record, this was their 4th buying week in a row
↑ Funds buying March under the 440 fair value level is a solid approach, especially with strong demand
↔↑ Last week’s exports were moderate at 1315K but ethanol was strong with the highest 1 week ethanol report all time at 1113K, still seeing signs of strong demand especially under fair value levels
↓ Overnight bean trade is offering some spill over resistance again, will see if that continues after 8:30
Beans – Funds buy 16K, exports not as poor last week as trade feared, overnight resistance again
↑ Funds bought 16K, still short 55K or 29% of record, some fund buying but not a major influence yet
↑ Last week trade had pre priced in expectations of a very poor weekly export report which ended up coming in at a moderate level of 1555K, if exports are even moderate it projects Jan at 1035
↓ Overnight continues the pattern of pessimistic export expectations, after seeing last week’s exports at a moderate level we will see if this light selling continues after 8:30
↔With Jan priced this far under fair value even small/moderate 8 AM sales may suggest support
Wheat – Funds sell 15K, US dollar remains close to last week’s highs, 2 more HRW rain/snow systems
↓ Funds were sellers of 15K, now short 45K or 28% of record, funds have sold 4 of the last 5 weeks
↔The US dollar remains close to Thursday’s high, not easing back much at all from the recent spike
↓ Two more rain/snow systems are expected for HRW areas on days 1 – 2 and 9 – 10, together they total the rain equivalent of 1” to 3 ½” with wide coverage of HRW and SRW areas
Cattle – The feeder index spiked $3.29 higher in 2 days last week, BB still moving lower
↔Friday’s PM BB was choice -0.46 select -0.52 packer BE at 183.98, packer cushion -$3.44
↑ Cash feeders and the feeder index report saw a $3.29 bounce in 2 days last week which added aggressive support to feeders which spilled over partially to live cattle, that index is worth watching
↓ BB continues lower, if we assume a $2 lower cash trade average last week then packer gross profits are still starting this week at -$1.44, not a number to expect even a steady cash trade much less higher
↓ Futures finished last week pricing in cash about -$1.50 so there is still downside potential just to match last week’s trade and that doesn’t factor in any lower cash trades this week
↔The cash feeder bounce was amazing last week but that doesn’t change packers inability to pay higher cash when they are taking their 3rd largest losses since we started tracking that number in 2018