GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 to 3 cents higher.
Wheat: SRW 7 to 10 cents higher; HRW 4 to 6 cents higher; HRS 5 to 7 cents higher.
GENERAL COMMENTS: Wheat led the way higher overnight, seeing strong corrective gains. Corn and soybeans traded on either side of unchanged and favored the upside into the break. Outside markets are favorable this morning as front-month crude oil futures are trading higher and near recent highs and the U.S. dollar index is trading over 300 points lower.
USDA announced daily soybean sales of 120,000 MT to unknown destinations for 2024-25.
Stats Canada estimated Canadian all-wheat plantings at 26.641 million acres, roughly 300,000 acres less than analysts expected. Wheat acres declined from March intentions of 27.045 million acres and 27.028 million acres last year. Canola plantings are estimated at 22.077 million acres, above expectations of 21.520 million acres. Canola seedings increased from March intentions of 21.394 million acres but slipped marginally from 22.082 million acres last year.
A projection of spending under status quo policy (i.e. current law) becomes the farm bill baseline. And, if spending on the new proposal matches the baseline, then it is said to be “budget neutral.” Of note: Congress can just choose to spend what it wants. It doesn’t have to be budget neutral, but spending over the baseline simply opens it up to budget points of order. However, few things go through the normal process these days where that sort of thing matters. Much just ends up in a supplemental where spending is simply a matter of what they get broad agreement on. Farm bill prediction from a veteran analyst: “For what it’s worth, I think the best (only) chance of a farm bill this year is in a broad supplemental where spending on Title 1 won’t matter… and where SNAP is left alone.”
China hopes negotiations will lead to a “mutually acceptable solution” with the European Union on preliminary tariffs on Chinese electric vehicles (EV) scheduled to take effect on July 4, its commerce ministry said. Beijing wants the EU to scrap plans to impose the curbs, Chinese state media reports, but Brussels has made clear it expects China to come to technical talks taking place this week with a road map for “addressing the injurious subsidization” of its EV industry if there is to be a negotiated outcome. The ministry also said it had received and was reviewing materials submitted on behalf of China’s electronic products industry concerning an EU trade barrier investigation.
Export sales for the week ended June 20:
Corn: Net sales of 542,200 MT for 2023-24, up 6% from the previous week but down 39% from the four-week average. Mexico led purchases, followed by Japan. Traders expected sales from 400,000 MT to 1.1 MMT for 2023-24. Exports of 1.177 MMT were down 21% from the previous week and 11% from the four-week average.
Soybeans: Net sales of 282,900 MT for 2023-24, down 49% from the previous week and 19% from the four-week average. Sales came in below expectations from 300,000 to 600,000 MT for 2023-24. Exports of 391,900 MT were up 15% from the previous week and 43% from the four-week average.
Wheat: Net sales of 667,200 MT for 2024-25, up 13% from the previous week. Increases came primarily for unknown destinations and the Philippines. Exports of 323,100 MT. Traders expected sales from 200,000 to 600,000 MT for 2024-25.
CORN: December corn futures saw action on both sides of unchanged overnight. Bulls are seeking to overcome initial resistance at $4.41, while additional resistance lies at $4.43 then the psychological $4.50 mark. Support stems from the overnight low of $4.33 1/4, then downtrend line support at $4.31.
SOYBEANS: November soybean futures saw modest corrective buying overnight. Initial resistance stems from $11.13 1/4 and is backed by the 10-day moving average at $11.25 1/2. A push lower finds support at $11.07 then the psychological $11.00 mark.
WHEAT: December SRW futures saw modest strength overnight. Bulls are seeking to build on strength and overcome yesterday’s high of $5.94 3/4 before tackling the psychological $6.00 mark. Support lies at $5.82 3/4 then $5.75 on resurgent selling pressure.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle and feeders are expected to open modestly lower after yesterday’s surge higher, as the norm for futures has been a day or two of consolidation following a big up day. Cash cattle trade has been slow to develop this week as packers are trying to buy cattle at lower values after two weeks of record prices and feedlots are holding out for higher bids. Traders narrowed discounts to the cash market yesterday, though they remain wide. Wholesale beef prices declined Wednesday as Choice cutout fell 54 cents to $322.85 and Select sunk $2.40 to $302.86. USDA reported net beef sales of 16,700 MT for 2024, up 13% from the previous week and 17% from the four-week average.
HOGS: Lean hog futures are expected to open mostly lower as the bounce in cash fundamentals is likely to be short-lived. Futures continue to trend lower on the daily bar chart and yesterday’s corrective gains did little to negate the downtrend. The CME lean hog index is up 7 cents to $89.92 as of June 25 and pork cutout firmed 21 cents to $95.52 Wednesday, led by surging bellies. Movement was weak at just 207.11 loads. Price action today is likely to be driven by positioning ahead of this afternoon’s USDA Hogs & Pigs Report, which is expected to show a slightly bigger hog herd as of June 1. USDA reported net pork sales of 39,200 MT for 2024, up 83% from the previous week and 25% from the four-week average.