GRAIN CALLS
Corn: 10 to 15 cents lower.
Soybeans: 25 to 30 cents lower.
Wheat: 15 to 20 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat faced heavy price pressure during overnight trade. We expect the heavy selling to continue this morning as forecasts offer hope for relief in some areas over the next week to 10 days. Key today will be whether sellers pile on to extend the overnight losses or buyers show up under the market.
USDA reported daily soybean sales of 132,000 MT to China for 2023-24. USDA also reported daily soymeal sales of 183,300 MT to the Philippines for 2023-24. This follows daily soybean sales of nearly 1.8 MMT to China, Mexico and “unknown destinations” USDA reported last week.
Beneficial rain fell on much of the Midwest during the weekend with notable exceptions from eastern North Dakota to east-central South Dakota to south-central Iowa while hot temperatures occurred from eastern Kansas and eastern Nebraska to central and southern Illinois and southwestern Indiana. Temps have moderated from last week’s extreme levels, though crops in the Northern Plains and upper Midwest will continue to be stressed by a lack of rainfall, though World Weather Inc. says improved rainfall chances could be seen by the weekend and early next week. Central and southern areas of the Midwest are expected to see some rains this week, along with more moderate temps. The Delta is expected to remain hot and dry.
Russia says it will continue dialogue on prospects for a peaceful resolution of the Ukraine crisis with China, Brazil and African partners. Ukrainian President Volodymyr Zelenskyy announced the war was “returning to Russia’s territory,” stirring tensions in the ongoing conflict.
Brazil’s safrinha corn harvest reached 55% done as of last Thursday, according to AgRural, behind last year’s 73% clip on that date. Late-season rains continue to slow efforts in Paraná and Mato Grosso do Sul. World Weather says forecasts indicate favorable harvest weather during the next 10 days.
CORN: December corn futures gapped lower overnight and sharply extended the losses from late last week. The contract is now trading below the short-, intermediate and long-term moving averages, giving bears the clear upper hand. Near-term support is at the psychological $5.00 mark. The overnight gap from $5.24 1/2 to $5.25 1/2 is initial resistance.
SOYBEANS: November soybean futures gapped below the 20-day moving average overnight and sharply extended the losses from late last week. The contract is trading below the 5-, 10- and 20-day moving averages, but still above the intermediate and long-term averages. Near-term support is at the 200-day average around $13.34 1/2. The overnight gap from $13.75 1/2 to $13.79 is strong near-term resistance.
WHEAT: December SRW futures dropped below last week’s lows overnight but the 20-day moving average at $7.03 1/2 provided support. That’s followed by the psychological $7.00 mark and the 40-day average near $6.98. Near-term resistance is in the $7.12 to $7.20 area.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a mixed tone in what’s likely to be light and choppy price action. Bulls must defend support at last week’s lows to avoid fresh chart-based selling. But the downside should be limited by the discount futures hold to the cash market. Last week’s cash cattle trade was limited with neither packers nor feedlots willing to budge on negotiations. That means this week’s showlist will be bigger. Typically, that favors packers in cash negotiations. But with tight market-ready supplies, one week of slow sales shouldn’t handcuff feedlots. We expect traders to remain cautious buyers of futures despite bullish supply fundamentals as they prepare for what’s likely to be another week of extended cash negotiations. Wholesale beef prices continued their seasonal decline on Friday, with Choice down 86 cents and Select $2.22 lower.
HOGS: Lean hog futures are expected to open with a mixed tone. August hogs could see followthrough buying after a strong close on Friday, especially given the contract’s discount to the cash index. But some selling pressure could be felt in deferred contracts. The CME lean hog index is down 3 cents to $105.81 (as of July 27), the first daily drop since the end of May. August lean hog futures finished Friday $2.61 below today’s cash quote, though traders will likely be comfortable with the discount structure with the cash index hinting that a seasonal top may be close. The pork cutout value fell $1.26 on Friday.