GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 6 to 12 cents higher.
Wheat: SRW and HRW 10 to 15 cents higher; HRS 5 to 8 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat firmed amid active followthrough buying during the overnight session, which is expected to carry over to daytime trade. Corn and soybeans are poised for big weekly gains as funds are covering short positions. The U.S. dollar index is down more than 600 points in reaction to the employment data for April. Crude oil futures are modestly firmer.
USDA announced daily soybean sales of 122,000 MT to unknown destinations for 2023-24.
Torrential rains and flooding are disrupting the final stages of harvest in Rio Grande do Sul, Brazil. “Crops are under a foot of water, Rabobank analyst Vitor Pistoia told Reuters. We don’t know the extent of the damage because it’s still wet and the forecast is for further rain. The state could easily lose 1 million tons.” Meanwhile, hot and dry weather in central Brazil is damaging safrinha corn, Pistoia said. Those weather patterns are expected to continue in Brazil next week, with wet areas continuing to get rain and dry areas remaining stressful for safrinha corn.
Frost and freezes occurred in southern Argentina this morning, which World Weather Inc. says may have caused some damage to soybeans, mostly to crop quality.
Russia’s IKAR agricultural consultancy cut its forecast for Russia’s wheat crop to 91 MMT from 93 MMT previously. The total grain production forecast was lowered 4 MMT to 142 MMT. IKAR now expects Russia to export 64.5 MMT of grain, including 50.5 MMT of wheat in 2024-25, down 3.5 MMT and 1.5 MMT, respectively.
The UN Food and Agriculture Organization global food price index inched up 0.3% in April, as increases in the prices for meat, vegoils and cereal grains more than offset declines in sugar and dairy. The April index was still down 7.5% from last year. Compared to year-ago, prices declined 0.4% for meat, 4.3% for dairy, 18.3% for cereal grains and 14.6% for sugar, while vegoil prices rose 0.7%.
The U.S. economy added 175,000 non-farm payrolls in April, which was less than expected and down notably from the upwardly revised figure of 315,000 for March. Average hourly earnings increased 0.2% last month and 3.9% over the past year. The unemployment rate ticked up to 3.9%. Fed fund futures now reflect two 25-basis points cuts to interest rates this year, with more than three-quarter odds of the first reduction coming in September.
CORN: July corn futures pushed above the 100-day moving average and reached the highest level since early February during the overnight session. The contract has retracted 38.2% of the decline from the October high to the February low. A 50% retracement would be near $4.78.
SOYBEANS: July soybean futures actively extended strong gains from the two previous days during overnight trade. Next resistance is at the 100-day moving average near $12.22. The psychological $12.00 mark is initial support.
WHEAT: July SRW futures continue to trade in a short-term range outlined by this week’s low at $5.93 1/2 and last week’s high at $6.33 1/4. Initial resistance is at the 200-day moving average around $6.25.
LIVESTOCK CALLS
CATTLE: Choppy.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a choppy tone this morning. Price action has been highly volatile in this week’s back-and-forth trade. While prices may not be as volatile, neither bulls nor bears have been able to maintain a strong upper hand. Bulls still have Monday’s downside chart gap they could try to fill. The sharp price rebound in cattle futures Thursday triggered stronger cash cattle bids from packers, with some prices $1.00 to $2.00 higher than the previous week. With futures at big discounts to the cash market, the late-week strength in the cash market could trigger followthrough buying today. Wholesale beef prices continued their slide, with Choice falling 64 cents and Select down 9 cents on Thursday. Movement remained strong at 164 loads.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on support from the resurgent cash market, though we doubt traders will want to be too aggressive in building premiums to the cash index. The CME lean hog index is up 32 cents to $90.92 as of May 1, the second consecutive day of gains after a four-day slump. The pork cutout value slipped 11 cents on Thursday as a $13.03 rise in primal bellies was more than offset by sharp declines in loins, butts, ribs and hams.