GRAIN CALLS
Corn: 4 to 8 cents lower.
Soybeans: Steady to 4 cents lower.
Wheat: SRW 2 to 4 cents higher; HRW 3 to 5 cents higher; HRS 6 to 10 cents higher.
GENERAL COMMENTS: Corn and soybeans favored the downside overnight, while wheat firmed late in the session. Outside markets should help a little, though corn and soybean traders are more focused on weather and preparations for USDA’s reports on Friday. Crude oil futures are modestly firmer, while the U.S. dollar index is more than 350 points lower this morning.
Rain is expected across the Corn Belt, starting in the west this weekend and then advancing to the east next week. But World Weather Inc. warns, “Be cautious here… the Gulf of Mexico is still not open as a good moisture source and the abundant rain seen in the GFS [U.S.] model will not likely verify. The European model has the best forecast through day 10.”
Export sales for the week ended June 1:
Corn: Net sales of 172,700 MT for 2022-23, down 8% from the previous week but up notably from the four-week average. Net sales reductions of 106,800 MT for 2023-24. Traders expected (100,000) to 600,000 MT for 2022-23 and 100,000 to 400,000 MT for 2023-24.
Soybeans: Net sales of 207,200 MT for 2022-23, up 68% from the previous week and notably higher than the four-week average. Net sales of 264,600 MT for 2023-24. Traders expected (100,000) to 300,000 MT for 2022-23 and 50,000 to 400,000 MT for 2023-24.
Wheat: Net sales of 234,800 MT for the 2023-24, which began June 1. Traders expected 200,000 to 550,000 MT for 2023-24. There were undelivered sales of 877,400 MT carried over from 2022-23 to the new-crop marketing year.
CORN: July corn futures remain in the long-term downtrend drawn off the fall and winter highs, but are also in a short-term uptrend from the May lows. Bulls have the short-term upper hand but must force a move above the long-term downtrend that intersects around $6.23 or there’s risk the uptrend from the May lows won’t hold.
SOYBEANS: July soybean futures are hinting at a potentially extended move higher, but must close above $13.83 3/4 to give stronger technical signals. If the contract rolls over before that, the longer-term downtrend will remain the dominant chart pattern.
WHEAT: July SRW futures remain technically bearish after a failed attempt on Tuesday to clear the short-term downtrend drawn off the winter and spring highs and the long-term downtrend from last fall’s highs. Clearing those strong resistance levels is needed to signal a market bottom.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open lower on followthrough selling after a sharp corrective pullback on Wednesday. But cash cattle have traded as much as $10 higher so far this week and futures are well below the cash market. Price action the next couple days will determine if traders view breaks as buying opportunities given bullish fundamentals or whether a major top is in place. Until the cash market signals it has topped, the downside should be relatively limited for futures. USDA reported net beef sales of 12,800 MT for 2023, down 29% from the previous week and 27% below the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone amid firming cash fundamentals, though buyer interest could be limited if cattle face heavy selling pressure. The CME lean hog index jumped $1.18 to $83.04 (as of June 6). That’s the biggest daily increase since late December. June lean hog futures, which expire on June 14 and will be cash settled two days later, finished yesterday $4.66 above today’s cash quote. July hogs finished $3.885 above the cash index. The pork cutout value firmed 17 cents on Wednesday, while movement totaled 300.3 loads. USDA reported net pork sales of 25,500 MT for 2023, up 13% from the previous week but down 11% from the four-week average. Lead buyers included Mexico (9,100 MT) and China (8,100 MT).