GRAIN CALLS
Corn: 3 to 6 cents higher.
Soybeans: 15 to 25 cents higher.
Wheat: SRW 10 to 15 cents higher; HRW 12 to 18 cents higher; HRW 15 to 20 cents higher.
GENERAL COMMENTS: Corn, soybean and spring wheat futures firmed amid followthrough buying overnight, while the winter wheat markets actively followed to the upside. Traders will have a wide focus today as they even positions ahead of Wednesday’s USDA reports while factoring in weather and crop condition ratings and monitoring the Black Sea grain situation. Outside markets are quiet and won’t provide price direction.
World Weather Inc. says the southern Corn Belt, Central Plains, northern Delta and Southeast will experience the most frequent and significant rain in the next 10 days. The northern Corn Belt, especially northwestern areas of the region, is expected to see erratic rainfall, though temps are likely to be mild during the next 10 days. Warmer temps are expected to arrive after the 10-day window.
USDA raised its “good” to “excellent” crop condition ratings to 55% for corn and 51% for soybeans, up four and one point, respectively. Corn improved more than expected, while soybeans rose less than anticipated. When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop improved 5.1 points to 344.6, though that was still 20.5 points (5.6%) below last year at this time. The soybean crop improved 3.3 points to 331.7, which was still 24.7 points (6.9%) below year-ago. Improvements in Nebraska led both crops.
Crop consultant Dr. Michael Cordonnier left his corn and soybean yield and production forecasts unchanged this week. He forecasts the U.S. corn crop at 15.10 billion bu. on a yield of 175 bu. per acre. Cordonnier forecasts the soybean crop at 4.17 billion bu. on a yield of 50.5 bu. per acre.
USDA’s spring wheat ratings dropped to 47% “good” to “excellent,” down one point from the previous week. On our weighted CCI, the spring wheat crop dropped another 5.1 points to 328.4. That was 47.2 points (12.6%) below last year at this time.
Russian drone attacks on the Ukrainian region of Odessa resulted in fires at two port terminals, including one grain facility. Oleg Kiper, head of the Odessa Oblast (province) Military Administration, said Ukrainian anti-aircraft defenses foiled “the enemy’s plan to attack the grain terminal.”
CORN: The recent consolidation trade in December corn futures has formed a huge bear flag on the daily chart. To negate the bearish formation, bulls would need a close above last week’s high at $5.09 1/2. A close below last week’s low at $4.85 1/2 would confirm a downside breakout from the bearish formation.
SOYBEANS: November soybean futures have staked out a huge short-term trading range from the June 28 low at $12.56 3/4 to last week’s high at $13.91 3/4. Bulls have the technical advantage but would need an upside breakout to generate fresh momentum. Near-term support starts at the 5-day moving average around $13.44 1/2.
WHEAT: December SRW futures continue to consolidate around the recent lows. Near-term support is at last week’s low at $6.57 1/4. Near-term resistance starts at the 10-day moving average near $6.79 and extends to $6.97 3/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone on support from discount futures hold to the cash market. The average cash cattle price firmed 73 cents to $182.06 last week, as stronger prices in the northern market offset weaker values in the Southern Plains. This week’s cash tone is likely to be mixed again given the supply discrepancies, which means the number of head traded in each region will determine the overall price trend. Wholesale beef prices continued to soften, dropping $3.11 in Choice and $3.30 in Select on Monday. Movement was decent at 106 loads.
HOGS: Lean hog futures are expected to open with a mixed tone. While cash fundamentals remain strong, the market could face followthrough chart-based selling after a relatively poor close on Monday. The CME lean hog index is up another 72 cents to $98.15 (as of July 7). After Monday’s modest losses, the premium to today’s cash index in July lean hog futures was down to 65 cents, while the discount in August hogs widened to $3.975. That suggests traders sense the seasonal cash rally is nearing an end even though the index has shown some of its strongest gains the past three days. The pork cutout value inched a penny higher on Monday as strong morning gains failed to be sustained. Movement was light at 226.3 loads.