GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 15 to 25 cents higher.
Wheat: SRW and HRW steady to 2 cents lower, HRS mixed.
GENERAL COMMENTS: Soy complex futures traded sharply higher overnight, which supported corrective buying in the corn market. Winter wheat futures failed to maintain earlier price strength and faded to mild declines, while spring wheat ended mixed. Outside markets are price-negative for grain/soy futures with crude oil about 75 cents lower and the U.S. dollar index up around 275 points.
Multiple waves of rain are expected to move across the central U.S. this week, favoring central and southern areas of the Corn Belt. Northern areas will likely see only sporadic rains. Temps are expected to remain seasonal to below normal for much of the Corn Belt.
Areas of the Southern Plains received heavy rains, wind and hail over the weekend, which damaged the HRW wheat crop. HRW wheat areas in Oklahoma and Kansas will get more rains this week, which could hamper crop quality and harvest activity, while Texas will be hot and dry.
Turkish President Recep Tayyip Erdogan said he was “hopeful” the Black Sea grain deal, which expires on July 17, could be extended for three months. Erdogan met with Ukrainian President Volodymyr Zelenskyy on Saturday. Erdogan wants to talk with Russian President Vladimir Putin this week, though the Kremlin says there are currently no plans for a meeting. Russia’s RIA news agency reported “there is no optimism” for the extension of the deal – a position that Moscow has reiterated frequently in recent weeks – citing a source familiar with the negotiations.
China’s customs agency will now require importers to stage imported soybeans at specific warehouses before they get quarantine permission for the shipments to enter the domestic market. The increased inspections process will slow clearing times on soybeans arriving at Chinese ports.
China’s producer prices fell at their fastest pace in over seven years in June, while consumer prices were the lowest since February 2021. China’s producer price index dropped 5.4% annually in June. It was the ninth consecutive month of producer deflation and the fastest fall since December 2015 amid weakening demand and moderating commodity prices. China’s consumer price index was unchanged from year-ago in June. Food prices rose for the first time in three months due to a rebound in the cost of both fresh vegetables and eggs despite a sharp fall in pork prices.
Brazil’s safrinha corn harvest advanced to 27% done as of last Thursday, according to AgRural. While that’s behind 41% on that date last year, yield remain strong. There’s still risk of a frost/freeze could clip late-developing safrinha corn, any potential damage at this point wouldn’t have a major impact on production. Brazil’s corn crop will be record-large this year.
CORN: December corn futures continue to consolidate around the recent lows. Near-term support is at last week’s low at $4.85 1/2, which was the lowest since October 2021. Last week’s high at $5.09 1/2 is near-term resistance.
SOYBEANS: November soybean futures regained Friday’s losses during overnight trade as the contract bounced between the 10-day moving average around $13.19 1/2 and the 5-day average at $13.41. Near-term resistance is in the $13.45 to $13.55 area. Near-term support is in the $13.20 to $13.00 area.
WHEAT: December SRW futures are consolidating around the recent lows. Near-term support is last week’s low at $6.57 1/4, followed by the psychological $6.50 mark. Near-term resistance is in the $6.72 to $6.75 area.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone on followthrough buying after a strong close on Friday. Packers had to get more aggressive with cash cattle bids in the northern market late Friday due to tightness of market-ready supplies in that region. With packers thought to need more near-term supplies, cash cattle prices are expected to strengthen in the northern market this week. But prices may again weaken in the Southern Plains where supplies are more plentiful. Wholesale beef prices continued to drop, falling another $2.97 for Choice and $4.34 for Select on Friday, though movement improved to 134 loads amid the sharp price drop.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on support from firming cash fundamentals. The CME lean hog index is up $1.36 to $97.43 (as of July 6). That follows a jump of $1.39 the previous day and signals the seasonal rally in the cash index is gaining steam. July lean hog futures, which expire a week from today and will be cash settled on July 19, finished Friday at a $1.57 premium to the cash index while August hogs held a $2.28 discount. The pork cutout value firmed $2.94 on Friday, driven mostly by a nearly $14 jump in primal bellies.