GRAIN CALLS
Corn: 3 to 8 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: 2 cents lower to 2 cents higher.
GENERAL COMMENTS: Corn futures traded lower overnight, while soybeans finished the session with mild gains and wheat posted mixed trade. Outside markets are mixed, with crude oil up around $1.50 and the U.S. dollar index nearly 200 points higher.
The Corn Belt will experience net drying over the next 10 days, with above-normal temps expected through the weekend before a brief cooling next week. Rainfall chances will be limited. Some cool air masses expected to arrive the second half of this month will improve rainfall chances, though that’s still far enough out that forecasts could change.
The Senate late Thursday passed the bipartisan Fiscal Responsibility Act to suspend the nation’s borrowing limit until early 2025 and cap future spending. The debt ceiling bill will not constrain efforts to pass emergency aid packages for Ukraine and respond to national security threats such as China. It also doesn’t limit the Senate’s ability to appropriate emergency supply supplemental funds to respond to various national issues, such as disaster relief.
The U.S. economy added 339,000 non-farm payrolls in May, well above expectations for 190,000. The unemployment rate rose to 3.7%. Despite this uptick, the jobless rate remained historically low and suggested the labor market remained tight. Hourly earnings increased 0.3% in May and rose 4.3% over the past year.
Export sales for the week ended May 25:
Corn: Net sales of 186,700 MT for 2022-23 and 312,600 MT for 2023-24. Traders expected sales of (100,000) to 400,000 MT for 2022-23 and 0 to 300,000 MT for 2023-24. China bought 70,800 MT of old-crop corn during the week.
Soybeans: Net sales of 123,400 MT for 2022-23 and 301,000 MT for 2023-24. Traders expected sales of (100,000) to 300,000 MT for 2022-23 and 0 to 450,000 MT for 2023-24. China bought 265,000 MT of new-crop soybeans during the week.
Wheat: Net sales reductions of 210,500 MT for 2022-23 and net sales of 466,500 MT for 2023-24. Traders expected sales of (100,000) to 100,000 MT for 2022-23 and 200,000 to 450,000 MT for 2023-24
CORN: July corn futures ran out of fresh buyers above $6.00 on Thursday and finished low-range, which triggered followthrough selling overnight that dropped the contract below the 10- and 20-day moving averages. Next support is this week’s low at $5.77 1/2. Resistance is layered from $5.84 to last week’s high at $6.06 3/4.
SOYBEANS: July soybean futures are back in the short-term consolidation range after a failed downside breakout earlier this week. Near-term support and resistance are at $12.70 3/4 and $13.48, respectively.
WHEAT: July SRW futures remain technically bearish. This week’s spike low at $5.73 1/4 is near-term support. Resistance is layered from $6.20 to $6.69.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open higher on followthrough buying after explosive gains on Thursday. Cash cattle traded as much as $9 higher than week-ago on Thursday, with the strongest prices in the northern market. Thursday’s price action suggests this week’s average cash cattle price will easily top the all-time high of $180.44 posted in mid-April. June live cattle futures surged amid the soaring cash prices on Thursday but still ended $3.04 below last week’s average price – and much further below this week’s eventual price. With that said, the market could face profit-taking ahead of the weekend. After all, traders have been content keeping futures at a deep discount structure. Choice boxed beef prices firmed 60 cents, while Select dropped 83 cents on Thursday. Movement was strong at 147 loads. USDA reported net beef export sales of 18,100 MT for 2023, down 1% from the previous week and unchanged from the four-week average.
HOGS: Lean hog futures are expected to open with a mixed tone. The CME lean hog index is up 10 cents to $79.63 (as of May 31), ending a three-day skid. After strong gains this week, June hogs finished Thursday $4.12 above today’s cash quote. With just under two weeks until contract expiration, traders are signaling they expect the cash index to show increased price strength. July hogs finished yesterday $2.42 above the cash index, while the August contract held a modest 39.5-cent premium. The pork cutout value firmed 41 cents on Thursday, while movement totaled 232.6 loads. USDA reported net pork export sales of 22,600 MT for 2023, down 23% from the previous week and 36% below the four-week average.