GRAIN CALLS
Corn: 2 to 5 cents lower.
Soybeans: 2 to 5 cents lower.
Wheat: Winter wheat 4 to 8 cents lower; spring wheat 2 to 4 cents lower.
GENERAL COMMENTS: Corn, soybeans and SRW wheat faced followthrough selling overnight, while HRW and HRS wheat futures pulled back from Tuesday’s gains. Markets worked well off their overnight lows late in the session, suggesting selling pressure won’t be overly extreme – and there could be an attempt to push prices above unchanged during daytime trade if early seller interest is limited. Outside markets have shifted and are now mildly price-supportive for grains with the U.S. dollar index down nearly 400 points and crude oil modestly firmer.
Russia says its “position is well known... and consistent” as talks to extend the Black Sea grain deal beyond the current May 18 deadline are scheduled to get underway in Istanbul. Senior officials from Russia, Ukraine, Turkey and the United Nations are scheduled to meet over the next two days in hopes of reaching an agreement to continue Ukraine’s grain shipments under the deal and also facilitate greater shipments of Russian grains and fertilizers.
Traders will start to even positions ahead of Friday’s May crop reports from USDA, which will feature updates to old-crop ending stocks, the initial look at the 2023-24 balance sheets and changes to global production and carryover.
World Weather Inc. says rainfall across the Northern Plains is expected to be “widespread and significant” late this week into the weekend. Southeastern South Dakota, southwestern Minnesota and eastern Nebraska will also receive rains. Lighter-than-normal rains are expected in the lower and eastern Midwest during the next 10 days.
The annual U.S. consumer inflation rate eased to 4.9% in April from 5.0% in March. That marked the smallest year-over-year increase since May 2021. The core consumer price index (CPI), which strips out food and energy costs, increased 5.5% annually, down from March’s 5.6%. Short-term interest rate futures rose after the CPI data, as traders added to their bets the Fed will pause in June.
CORN: July corn futures are fully bearish from a technical perspective, trading below the short-, intermediate and long-term moving averages. The contract stalled at the 10-day moving average at $5.86 1/2 overnight. That will be initial resistance, followed by the 5-day average at $5.89 3/4. Near-term support extends from the overnight low at $5.79 to last week’s low at $5.69 1/4.
SOYBEANS: July soybean futures are trading below the short-, intermediate and long-term moving averages. The contract was turned back at the 10-day moving average at $14.18 1/2 overnight. That will serve as initial resistance, followed by the 5-day average at $14.21 1/2. Near-term support extends from the psychological $14.00 mark to last week’s low at $13.92 1/4.
WHEAT: July HRW wheat futures are pausing just above last week’s high, which could turn into a bull flag. Near-term resistance is at the 200-day moving average at $8.68 1/2. Near-term support is in a range from the 5-day moving average at $8.35 1/2 to the 100-day average at $8.34 1/2.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open higher on followthrough buying after a strong finish on Tuesday. While the price action was mostly tied to a narrowing of the discount futures hold to the cash market, there is now some talk cash prices could firm up for the week as market-ready supplies are tight and packer margins are positive. Meanwhile, wholesale beef prices fell $1.18 for Choice boxes and 23 cents for Select on Tuesday, though movement improved to 121 loads. Despite recent weakness, Choice beef prices remain strong, still trading well above $300.00 and the Choice/Select spread is wide at $22.49 amid tight market-ready supplies.
HOGS: Lean hog futures are expected to open higher on followthrough buying. Much of Tuesday’s late strength was tied to spillover from strong gains in the cattle market. Most lean hog futures contracts posted key bullish reversals on Tuesday. Active followthrough buying the remainder of the week would suggest lows are in place and the delayed seasonal rally has begun. A lack of followthrough buying, however, would signal traders are still looking for fresh selling opportunities. The CME lean hog index is up 22 cents to $74.64 (as of May 6). The pork cutout value firmed 15 cents and movement improved to 334.9 loads on Tuesday.