GRAIN CALLS
Corn: 15 to 25 cents lower.
Soybeans: 25 to 40 cents lower.
Wheat: SRW 20 to 30 cents lower; HRW 15 to 20 cents lower; HRS 10 to 15 cents lower.
GENERAL COMMENTS: Traders ignored sharper-than-expected declines in corn and soybean crop condition ratings overnight and instead focused on forecasts offering some hope for improved rainfall chances. Wheat actively traded lower on spillover from corn and soybeans as winter wheat harvest is advancing, though slower than normal. Outside markets are sending mixed signals with crude oil around 75 cents lower and the U.S. dollar index about 250 points lower.
World Weather Inc. says rainfall will be erratic and light across the Corn Belt through the weekend, though chances for rains are greater next week, especially the second half of the week. Many areas of the region are likely to get some rainfall, though significant improvements in soil moisture are unlikely. Temps are expected to be mostly seasonal, with the exception being southern areas of the Corn Belt, which are expected to see hog temps Wednesday through Friday.
USDA rated 50% of the corn crop as “good” to “excellent,” down five percentage points from the previous week. The portion of crop rated “poor” to “very poor” increased three points to 15%. USDA rated 51% of the soybean crop as “good” to “excellent,” down three points from last week. The portion of crop rated “poor” to “very poor” increased two points to 14%. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 8.7 points to 337.8, while the soybean crop fell 10.4 points to 329.5. Declines in corn and soybean ratings were driven by Illinois, Iowa, Indiana, Minnesota and Missouri. The CCI ratings are now 31.7 points below year-ago for corn and 31.1 points below for soybeans – both 8.6% below year-ago at this time.
Crop consultant Dr. Michael Cordonnier cut his corn yield forecast by 2 bu. to 175 bu. per acre and his soybean yield by 0.5 bu. to 50.5 bu. per acre amid falling crop conditions and drought impacts. He now estimates production at 14.61 billion bu. for corn and 4.39 billion bu. for soybeans.
CORN: December corn futures plunged below Monday’s lows overnight. While the uptrend drawn off the May lows remains intact, bulls have lost momentum. The 50% retracement of the May-to-June rally is at $5.60 1/2 and will serve as next support. Uprending support intersects around $5.56 1/2 today and rises about 2 1/2 cents each day.
SOYBEANS: November soybean futures dropped below the psychological $13.00 mark and last week’s low overnight. The contract has retraced 38.2% of the rally from the May low to this month’s high. Next support is in the $12.85 to $12.51 area.
WHEAT: December SRW futures are looking toppy technically. Near-term support is the small June 21 gap from $7.28 1/2 to $7.27 3/4. Below that, support would be in the $7.00 to $6.91 range.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone. Traders are anticipating lower cash cattle prices again this week but futures are already trading well below the cash market, which should limit seller interest. Cash cattle averaged $182.57 last week, down $2.35 from the previous week and the second straight decline after record prices. Wholesale beef prices continued to drop on Monday, with Choice down 97 cents and Select 29 cents lower. Movement was light at 82 loads, as retailers typically slow their beef purchases once they have Fourth of July features covered.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on support from firming cash fundamentals. After rising $2.125 on Monday, July lean hog futures hold a $1.29 premium to the cash index, which is up another 71 cents to $92.11 (as of June 23). While the cash index continues to rise seasonally, traders will likely be cautious with how much premium they are willing to build into the soon-to-expire front-month contract. August hogs are trading below the cash index. The pork cutout value firmed $2.19 on Monday to $99.55, though movement was light at 258.4 loads.