GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 cent lower to 3 cents higher amid bull spreading.
Wheat: SRW 5 to 8 cents higher; HRW 10 to 15 cents higher; HRS 8 to 12 cents higher.
GENERAL COMMENTS: Wheat posted strong gains overnight, led by HRW contracts, ahead of USDA’s first winter wheat crop estimate later this morning. Soybeans and corn mildly favored the upside, though buyer interest faded at the end of the overnight session. Outside markets are mixed with crude oil modestly firmer and the U.S. dollar index more than 200 points higher.
USDA’s May Supply & Demand Report at 11 a.m. CT will feature updated U.S. and global old-crop ending stocks, along with the first official look at the 2023-24 balance sheets. USDA will also issue its first winter wheat production estimate. Traders expect increases in 2022-23 ending stocks for corn, soybeans and wheat. For 2023-24, ending stocks are expected to be 2.094 billion bu. for corn, 293 million bu. for soybeans and 602 million bu. for wheat. Traders expect USDA to estimate the winter wheat crop at 1.230 billion bushels.
Rains are expected to continue across much of the Midwest through Saturday. After that, there will be a mostly dry period through May 26, according to World Weather Inc. Temperatures are expected to be above normal through Saturday and then moderate.
Turkey says a deal to extend the Black Sea grain deal could be nearing. But Russia says there was nothing new to report after two days of talks between Ukrainian, Russian, Turkish and United Nations officials. As has been the case in the past, the negotiations will go down to the 11th hour ahead of the May 18 deadline.
China is expected to import fewer soybeans and corn in 2023-24. China’s ag ministry forecasts the country’s imports will fall 980,000 MT (1%) for soybeans to 94.22 MMT, while corn imports are expected drop 500,000 MT (2.8%) to 17.5 MMT.
CORN: July corn futures are consolidating just above the recent lows. Near-term boundaries extend from last week’s low at $5.69 1/4 to Monday’s high at $6.00. The eventual breakout from that range will likely kick off the next trending move.
SOYBEANS: July soybean futures firmed overnight after finishing well off session lows on Thursday. Yesterday’s spike low at $13.85 1/4 is near-term support, followed by the March low at $13.83 3/4. Near-term resistance extends from $14.18 to Monday’s high at $14.46 3/4. The 10-, 20- and 40-day moving averages all lie within that range.
WHEAT: July HRW wheat futures have formed a bull flag on the daily chart. A close above Thursday’s high at $8.63 3/4 would have bulls targeting the February high at $8.94 1/4. Near-term support is in the $8.40 to $8.25 range. July SRW wheat futures are technically bearish and struggling to work off their recent lows. Traders continue to extend the already historic HRW/SRW spread.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a mixed tone. Cattle futures have started strong the past two days but failed to hold gains through the close. After some light trade at steady/firmer prices in the Midwest earlier in the week, cash cattle traded more actively at lower prices compared with last week on Thursday. June live cattle futures finished Thursday roughly $11.00 below last week’s average cash price, so there shouldn’t be active selling even if there’s more cash trade at lower prices. Choice boxed beef prices fell $1.15 on Thursday, while Select rose 4 cents. Packers moved 128 loads on the day, the third straight strong daily load count.
HOGS: Lean hog futures are expected to open with two-sided trade. May lean hog futures expire today, meaning June will take over lead-month status. June hogs finished Thursday $8.475 above today’s cash quote (as of May 10) of $75.40. While the cash market has been on a steady climb for nearly three weeks, daily gains have been small, which has limited traders’ willingness to buy futures. The pork cutout value firmed $1.48 yesterday, though movement slowed to 271.8 loads. Packers are struggling to get the pork cutout above the low-$80 area given that supplies are stronger than demand.