Morning Update

This morning’s grain trade has wheat showing an advance, while corn is mixed, and soybeans have turned softer from what was initially higher starting Sunday night. Wheat trade found buying interest as black sea fob prices as newswires reported that Russian drones a missile attack damages on the Odessa and export facilities could be critical. The exact accounting of damages is not available yet. Ukrainian stated that agricultural export Enterprises and industrial buildings, were destroyed on Sunday. The degree of damage to export capacity has not yet been fully evaluated. Russia and Ukraine both broaden their drone attacks on each other during the weekend. Not surprisingly, Russian Pres. Putin won another six-year term as president on Sunday with an approval rating that was record high according to Russian media.

After the initial rally over the last two weeks, the Brazilian soybean market started to retreat as their harvest pranced, with farmers selling some remaining harvested crops that didn’t have storage.
The Commitment of Traders Report on Friday showed managed funds bought 40,867 contracts of corn (net -255,928), bought 16,862 contracts of soybeans (net -155,137), and sold 13,331 contracts of Chicago wheat (net -78,870). According to Peak Trading Research, the cheapest and most oversold Ag commodities include soybeans, soymeal, KC wheat, corn, and canola.

The FOMC meets this week, with a rate decision on Wednesday at 1:00 p.m. CT. The macro mood is mixed as traders anticipate the Federal Reserve decision and Chairman Powell’s press conference. Powell's dovish comments equate to more rate cuts, bringing the Dollar down and agricultural commodities up, and vice versa. Several policy decisions, including the BOE, BOJ, Brazil, and Russia, are also this week.

The rising black sea military tensions are now back on traders' minds, along with the upcoming USDA March Stocks and Seedings Report just eight trading days away. Choppiness will not likely enter the trade after the recent advance in corn and soybeans while we traders looked cover shorts. Also, there is a discussion that Russian and Ukraine weather is far drier than desired by farmers there, but it’s still too early to suggest any major reduced production. The conscripting of farmers who are being put into the military in Ukraine could also pose a problem in getting spring crops planted.

Live and feeder cattle futures ended last week slightly lower but were still within recent trading ranges that have developed over the last month. It was the second consecutive lower with the close for April cattle futures which hasn’t happened since December. Live cattle in the South did move $1 higher for the week to set new record highs of $186, while live sales in the North were quoted at $187-190, which was $2-5 higher for last week. Dressed sales were $1-7 higher at $295-301. Boxed beef dies were higher last week on reduced slaughter and building seasonal demand. Choice cutout picked up $4.86 and cleared at $311.90 while select was also higher by $4.97 at $with 302.40. Technical momentum asserted drifting, with feeder cattle closing below technical support. Live cattle are showing weakness, seeing a larger break. Both April and June live cattle are parked right on top of technical support and need to produce a rally immediately. Closing under 186.50 on April cattle would start technically breaking the market with liquidation from index funds.