It’s easy from the above chart to see that May Corn has been firmly entrenched in a tight trading range (530-560) since late January! The mkt is in transition from the Southern Hemisphere to the Northern Hemisphere – as Brazil/Argentine harvest winds down & US planting begins! Plus, the trade eagerly awaits the 3/31 Planting/Stocks report at 11am! Finally many funds are “evening up” in front of next Tuesday – both month & quarter end! Even prodigious exports last week including over 4 MMT of flash sales to China & over 3 MMT in Monday’s & Thursday’s reports weren’t enough to nudge it out upside! The mkt could well stay in the range with an upward bias until more is known about the US crop – soon going in!
May Beans have gotten a huge assist from May Bean Oil which has catapulted 500 points higher off a global shortage of veg oil & massive China demand! The high prices of Malaysia Palm Oil & Canadian Canola reflect the shortage! But tempering the gains is the imminent Planting Intentions & Quarterly Stocks Report issued next Tues at 2pm! Many large funds are afraid to take positions into the often volatile report! And there are apprehensions the acreage could be larger than forecast to take advantage of the 6 year high prices! Plus, the recent ethanol #’s were slightly bearish & the winter wheat crop is being blessed with frequent rains to the central plains! So there are enough negatives to offset the bean oil surge – to keep beans range-bound for now! But historically tight stocks & stellar Chinese Demand should keep the trends sideways to higher – regardless of the outcome of Tuesday’s report – at least until more is known about US production & yields!
While May Corn & Beans are consolidating near the top of their recent ranges – waiting the USDA on Mar 31st, Mar Wht is languishing some 70 cents off the top! Always the “weak sister”, lackluster exports & plentiful moisture in the central plains has kept this mkt under wraps! But if C & B stage another rally into the planting season off the inevitable weather scares, wht will gladly tag along!!
Considering what the Hog mkt has done this month & the resurgent US economy it’s simply mind-boggling of the inability of April Cattle to escape the narrow $2.00 trading range it’s been confined to the entire month of March! Some pundits opine that the mkt got ahead of itself – dialing in too much demand from the anticipated re-opening of US restaurants – & pushing in too much premium into the price! But certainly, as the economy recovers & more people drive & go out to eat & attend sporting events & concerts, this mkt will “catch” & soon challenge its Feb highs!!
As if it didn’t need any additional upside impetus, April Hogs benefitted from a bullish Pig Crop Report issued on 3/25 to stage another “gap higher & go” opening leaving yet another upside gap on the daily charts! That 4 open gaps since 3/15/21 – a veritable upside runaway mkt! But the move is supported by strong fundamentals as China is dealing with a resurgence of AFRICAN SWINE FEVER which is keeping their imports of US pork jacked up! Plus the US economic turn-around – lately fueled by stimulus checks & widespread vaccinations – promises to augment domestic demand with the re-opening of many restaurants, more driving & the inclusion of limited fans at various sporting events!