GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 10 to 20 cents higher.
Wheat: SRW 4 to 6 cents higher; HRW 6 to 10 cents higher; HRS 10 to 15 cents higher.
GENERAL COMMENTS: Corn, soybean and wheat futures firmed amid corrective buying during overnight trade as traders prepared for USDA’s reports later this morning. Outside markets have turned price-supportive for grain and soy futures, with crude oil around 50 cents lower and the U.S. dollar index down nearly 250 points.
USDA reported daily soybean sales of 132,000 MT to China for 2023-24.
Traders await USDA’s Acreage and Grain Stocks Reports at 11 a.m. CT – data that has a history of producing significant price moves. Analysts anticipate relatively modest changes in planted acres compared with March intentions. June 1 stocks are expected to total 4.255 billion bu. for corn, 812 million bu. for soybeans and 611 million bu. for wheat.
A derecho ripped across far eastern Nebraska and far northeastern Kansas to northern Missouri, southern Iowa and parts of Illinois and Indiana, resulting in some crop damage. Crop losses will not be as great as 2020, partly because of the timing of the event – late June vs. mid-August 2020. The storm produced some beneficial rains across dry areas of the region, with some areas receiving more than an inch of rain. World Weather Inc. says waves of rain will continue to impact the Midwest through the next week to 10 days with some of the greatest rain occurring this weekend and early next week.
CORN: December corn futures posted modest corrective gains overnight but bears have fully seized control, with the contract in a steep short-term plunge and back into the long-term downtrend from last fall’s highs. Near-term support is in the $5.25 to $5.20 area. Bulls would need a close above $5.47 1/2 to suggest a short-term low is in place. The contract is short-term oversold, though as we’ve mentioned that will not be a major factor in price action.
SOYBEANS: November soybean futures posted strong corrective gains overnight following Thursday’s pause. But bears still have the short-term upper hand technically. This week’s low at $12.56 3/4 is near-term support. Bulls would need a close above $13.00 to encourage traders a short-term low is in place.
WHEAT: December SRW futures are consolidating just below the 50% retracement of the rally from the May low to Monday’s high. Bulls would need to reestablish that level around $6.95 3/4 and the psychological $7.00 level as support to signal a short-term low is in place. Thursday’s low at $6.81 3/4 is near-term support, followed by a 61.8% retracement around $6.74 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone. Given tighter supplies in the northern market, packers raised cash cattle bids to steady-with-week-ago prices on Thursday. Combined with the $2 lower trade in the Southern Plains, this week’s average cash price will likely drop around $1 from last week. August live cattle futures still held a discount of around $8.00 to the cash market as of yesterday’s close. Wholesale beef prices firmed 15 cents for Choice and 50 cents for Select on Thursday.
HOGS: Lean hog futures are expected to open lower on pressure from USDA’s Hogs & Pigs Report that showed the U.S. hog herd up 0.1% from year-ago as of June 1, whereas traders expected a 0.7% decline. All categories except spring farrowings and summer/fall farrowing intentions came in higher than anticipated. We doubt the selling from the report data will be too intense or sustained, however, as cash fundamentals continue to firm. The CME lean hog index is up another 46 cents to $93.42 (as of June 28). The pork cutout value firmed $3.82 on Thursday to $102.90.