GRAIN CALLS
Corn: 8 to 12 cents lower.
Soybeans: 25 to 35 cents lower.
Wheat: 4 to 8 cents lower.
GENERAL COMMENTS: Corn, soybean and wheat futures faced corrective selling overnight after recent strong gains. The heavy selling pressure will carry over to the start of daytime trade. Key today will be whether funds actively take profits from long positions or use the break as a fresh buying opportunity. This is a full-blown weather market, so volatility is going to remain high and speculative money flow will be key to how markets close today.
Weather models boosted predicted rainfall in the northern Midwest, especially in Wisconsin and Michigan with some increase in shower activity suggested for the drier areas in Illinois, Indiana and Iowa over the next 10 days. However, World Weather Inc. says, “The increase in shower activity in the ‘I’ states has already been advertised in previous model runs and confidence is still not high that these areas will get enough rain to seriously change the moisture profile for any great length of time. Be watchful for surprisingly greater rainfall in a few of the driest areas during the coming week, but that kind of event will only impact a very small part of the overall driest region.” Meanwhile, hot air from Texas may briefly move north, “inducing warmer-than-expected temperatures in Kansas, Missouri and Illinois,” World Weather says.
Ukraine says it is nearly 100% certain Russia will exit the Black Sea grain deal when the current agreement expires in mid-July.
India’s wheat crop is much smaller than the Indian government estimates. India’s government forecasts the wheat crop at a record 112.74 MMT but the head of the Roller Flour Millers’ Federation said production was around 101 MMT to 103 MMT.
Due to Monday’s government holiday, export sales data for the week ended June 15 will be released on Friday morning.
CORN: December corn futures pulled back amid corrective selling overnight but the contract remains short-term overbought. Near-term support is previous resistance at $6.13 3/4 and then $6.06. Wednesday’s high at $6.29 3/4 is near-term resistance, followed by the October high at $6.37 1/4.
SOYBEANS: November soybean futures posted sharp corrective losses overnight but remain short-term overbought. Near-term support is at the 5-day moving average around $13.40 1/2 and previous resistance at $13.38 3/4. Wednesday’s high at $13.78 is near-term resistance.
WHEAT: July SRW futures posted modest corrective losses overnight. Previous resistance at $7.22 and $7.17 1/4 will serve as near-term support. Wednesday’s high at $7.35 1/2 is near-term resistance.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone. Cash fundamentals are weakening, which should cap buyer interest. But futures are already trading well below the cash market, which should limit the downside. Cash cattle started trading around $2.00 lower than last week, while wholesale beef prices fell another $2.66 for Choice and $3.68 for Select.
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 another 87 cents to $89.62 (as of June 20). After Wednesday’s corrective declines, July lean hog futures still held a $5.13 premium to today’s cash index quote. The pork cutout value bounced back from Tuesday’s decline with a $1.46 gain yesterday amid strength in all cuts, extending its seasonal rally.