US stock index futures were wearing red - lower - across the board early St. Patrick's Day morning, setting the stage for what should be another interesting week.
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Conversely, the Energies sector was decked entirely in green to start the day.
Commodity Bulletin: From crude oil to coffee, this FREE newsletter is for industry pros and rookies alike HRW wheat took center stage in the Grains sector to start the week following sub-freezing temperatures dipping into the US Southern Plains this past weekend.
Morning Summary: “Top of the morning to ye on this gray, drizzly afternoon. Kent O’Brockman live on Main Street, where today everyone is a little bit Irish, except of course, for…” This is an introduction from an episode of the long-running television show The Simpsons. Adjusting for Monday morning’s commodity complex, we could say, “Every sector is a little bit Irish (wearing green) except for US stock index futures”. A look at the Barchart Futures Market Heat Map pre-dawn shows the Indices sector all decked in red, though not by a lot. It will be interesting to see what happens with US stock indexes as another week gets under way. Having crossed the midpoint of March we find the S&P 500 down 508 points (8%), the Dow Jones Industrial Average off 3,585 points (8%), and the Nasdaq 2,451 points (12%) lower from recent all-time highs. I wrote recently about how the S&P 500 had turned technically bearish – again – based on the Index taking out its November low earlier this month. In other news, the sector showing the strongest cumulative gain early Monday morning was Energies with all markets wearing green as of this writing.
Wheat: I’m going to switch things up today and lead with the wheat sub-sector. Why? Because it is here, where all markets have red in their name, that the darkest green (largest gains) in the Grains sector is seen. The new-crop July HRW issue (KEN25) rallied as much as 17.75 cents overnight and was sitting within sight of its high pre-dawn on still light trade volume of less than 2,000 contracts. What was the catalyst for such a move? As I talked about over the weekend, a cold front brought freezing temperatures into the US Southern Plains HRW growing area both Saturday and Sunday mornings (attached temperature map is from Sunday). Is the 2025 HRW crop dead? Let me answer that question this way: Wheat’s nickname of “The Cockroach of the Grain World” is well-earned. Given this, my answer would be “No”. It will be interesting to see if a divergence between commercial and noncommercial activity develops this week. Recall last Friday saw the July-September futures spread close at a carry of 13.25 cents and cover 81% calculated full commercial carry while the September-December covered 80%. Those are both bearish reads. As for Watson, the noncommercial net-short futures position reportedly came in at 36,190 contracts, an increase of 8,620 contracts from the previous week.
Corn: The corn market was celebrating St. Patrick’s Day pre-dawn, albeit muted, with all contracts in the green on light trade volume. It isn’t often King Corn takes a backseat to The Cockroach, but such is the case as this week gets under way. The old-crop May issue rallied as much as 5.5 cents and was sitting 5.0 cents higher at this writing on trade volume of less than 15,000 contracts. The most notable feature of May corn early Monday is it has crept back above the nearest round number $4.60. Did the commercial side provide support overnight? The July issue gained as much as 5.0 cents on trade volume of less than 6,000 contracts, so my answer is “Probably not”, but we’ll wait to see what develops as today’s session unfolds. The National Corn Index (national average cash price) ($CNCI) was calculated Friday evening near $4.24 putting available stocks-to-use at 12.5%, as compared to the end of February’s 12.4% and the March 2024 figure of 12.6%. National average basis was calculated last Friday at 34.5 cents under May futures, 2.5 cents stronger than the previous Friday’s final figure but still leaning toward the previous 5-year low weekly close of 43.75 cents under May.
Soybeans: The soybean market was also wearing green early Monday morning. I would add the word “barely”, but that might be construed as the market was set to do some streaking. The May issue (ZSK25) rallied as much as 5.75 cents on trade volume of less than 12,000 contracts and was holding onto a gain of only 0.25 cent at this writing. Similarly, the July issue added 6.0 cents and was sitting just above unchanged while registering fewer than 5,000 contracts changing hands. My Blink reaction is the world’s largest buyer was not interested in the US soybean market overnight, meaning most of the support was likely spillover buying from wheat and corn. The latest CFTC Commitments of Traders report showed funds held a net-short futures position of 12,140 contracts as of Tuesday, March 11, a decrease of 22,140 contracts from the previous week. While I don’t see much reason for Watson to be concerned over its short futures positions, given the global trade situation, we’ll see what this week brings. Fundamentally the market remains neutral-to-bearish. The National Soybean Index was calculated at $9.5175 Friday evening, putting available stocks-to-use at 17.4%, generally unchanged from the end of February with the March 2024 figure down at 10.6%.
