GRAIN CALLS
Corn: 1 to 2 cents lower
Soybeans: 10 to 15 cents lower
Wheat: SRW and HRW 2 to 5 cents higher; HRS steady to 2 cents lower.
GENERAL COMMENTS: Two-sided trade was seen in the grain and soy markets overnight, though corn and soybeans ended the session under pressure. Wheat finished overnight trade mixed, with winter wheat contracts mildly firmer amid corrective buying while spring wheat was modestly lower. Outside markets are price-negative this morning. Soybean and soyoil futures were pressured by crude oil futures, which fell to the lowest level since April 11 and the drop in palm oil to the lowest price in more than a year. The U.S. dollar index is up nearly 400 points this morning, pushing to a new 20-year high.
Forecasts call for hot and mostly dry conditions across the major U.S. cropping areas over the next 10 days. World Weather Inc. says, “The U.S. Great Plains will experience frequent hot temperatures over the next couple of weeks with restricted rainfall resulting in livestock and crop stress. The western Corn Belt will also experience very warm to hot temperatures periodically, although the most threatening conditions should occur mostly in the Missouri River Basin. Eastern U.S. Midwest crop conditions will be mostly good during the next two weeks, despite lower than usual rainfall at times. No excessive heat is expected and showers and thunderstorms will occur periodically, but not necessarily producing large volumes of rain, though enough moisture will fall to support many crops. Delta weather will continue poor in the north until Sunday into Monday of next week when some rain is expected to finally fall, though only temporary relief is expected The Southern Plains will continue too hot for sporadic showers to have any meaning in easing long-term dryness.”
Officials from Russia, Ukraine and Turkey will hold talks today in Istanbul with United Nations officials on resuming Ukrainian grain exports via the Black Sea port of Odesa. Ukraine said a deal appeared very close as four-way talks resumed. Ukrainian Foreign Minister Dmytro Kuleba told Spanish newspaper El Pais, “We are two steps away from a deal with Russia. We are in the final phase and now everything depends on Russia.” Reuters quoted diplomats as saying the effort focuses on Ukrainian vessels escorting grain ships in and out of port while Russia would agree to a truce while shipments are made. Turkey would have responsibility for inspecting ships to ease Russian concerns they are not being used to smuggle weapons. Others think Russia could still drag the talks out.
China imported 8.3 MMT of soybeans in June, according to preliminary customs data, down 14.7% from May and 23% less than last year. don’t want to further build their inventories due to slackened demand from the country’s hog sector, which is saddled with poor production margins. Through the first half of 2022, Chinese soybean imports stood at 46.3 MMT, down 5.4% from the same period last year.
U.S. consumer inflation surged 9.1% in June, spiking to its highest level since November 1981. The two-year Treasury yield, which is closely tied to expectations for interest rate increases from the Federal Reserve, shot higher after the inflation data was released, rising 0.12 percentage points to 3.14%. The U.S. dollar index also firmed. Meanwhile, the International Monetary Fund again cut its economic growth forecast for the U.S. to 2.3% for 2022 from 2.9% in late June.
CORN: December corn pivoted around Tuesday’s low in overnight trade. The overnight low at $5.76 3/4 is initial support, with stronger support at last week’s low of $5.66 1/2. Bulls need a close above the psychological $6.00 level to stall downward momentum.
SOYBEANS: November soybeans dropped as low as $13.15 3/4 overnight. That is initial support, followed by last week’s low at $13.02 1/2 and then the psychological $13.00 mark. Near-term resistance is the 5-day moving average around $13.67 1/2.
WHEAT: December SRW wheat futures found support below yesterday’s low overnight, but couldn’t generate much corrective buying. Initial resistance is the 5-day moving average at $8.59 1/4, with initial support at last week’s low of $8.02 1/4.
LIVESTOCK CALLS
CATTLE: Steady/firmer
HOGS: Mixed
CATTLE: Cattle futures are expected to open with a mildly firmer tone amid followthrough buying after a second straight high-range close on Tuesday. Fundamental support should come from stronger-than-expected beef movement so far this week. On Tuesday, packers moved 178 loads of beef as Choice values increased 37 cents, though Select dropped 83 cents. Buyer interest in futures could be limited as traders wait on cash cattle trade to develop. So far, only very light trade has occurred at an average price of $145.88, according to USDA, which would be up from last week’s average of $144.35, though volume was too low for a true test of this week’s market. Cash sources signal there are scattered higher asking prices but few bids from packers, especially in the northern market where supplies are tighter. Buying in feeders could be limited by mild corrective buying in the corn market.
HOGS: July hogs hold a premium to the CME lean hog index just days ahead of the contract’s expiration and settlement. But the lead contract may find support from rising cash prices, with the CME lean hog index up another 79 cents today (as of July 11). Firming pork product prices will also be supportive as the cutout value rose $2.40 amid solid movement of 290.4 loads on Tuesday. Buyer interest in hog futures is likely to be limited and deferred contracts could face some pressure as traders sense a seasonal top in the cash index is close.
China imported 603,000 MT of meat in June, up 1.5% from May but down nearly 19% from last year. Through the first six months of this year, China imported 3.5 MMT of meat, down 31.9% from the same period last year, driven by a sharp reduction in arrivals of pork.