Grains and livestock ended mixed on Monday with corn and cattle higher, the rest of the complex lower.
Tomm Pfitzenmaier, Summit Commodity Brokerage, says corn held its own on Monday and closed higher, squaring ahead of the February WASDE.
While it could be a quiet report, Pfitzenmaier expects some tightening of the balance sheets for corn with an increase in demand, most notably due to higher exports.
If there was a bullish surprise and ending stocks fell below 1.5 billion bu. on corn that could finally get March corn above $5 he says.
Corn was also supported by strong export demand with weekly inspections at 52.5 million bu. and a flash sale of 14.4 million bu. sold to Mexico for this marketing year.
Trade estimates for soybean and wheat ending stocks in Tuesday’s WASDE show little change compared to January.
He says South American production may change slightly with a lower corn and soybean crop expected in Argentina due to heat and drought.
The average trade guess is 49.1 MMT on corn and 50.2 MMT on soybeans, which would be down nearly 2 MMT from January.
However, the losses could be offset by a bigger crop in Brazil with soybeans estimated at 170.2 MMT, up nearly 2 MMT from last month and corn seeing little change at 126.6 MMT.
Pfitzenmaier says soybeans and meal also saw pressure from improved Argentina weather, and tariff news with concerns about a brewing trade war and what that could mean for exports.
Wheat futures saw some profit taking after strong gains last week and the higher dollar.
Both live and feeder cattle futures staged a nice recovery on corrective buying after a tough down week.
The question is how much will the market retrace and is this just a head fake?
Pftizenmaier thinks a recovery in April live cattle from $202 - $203 is possible, especially since the cash market was not down as hard as the futures and cash is still trading at a premium.
Lean hog futures consolidated after hitting resistance.
