GRAIN CALLS
Corn: 2 cents lower to 2 cents higher.
Soybeans: 2 to 6 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW and HRS 8 to 12 cents higher.
GENERAL COMMENTS: Soybean and wheat futures extended last week’s gains during overnight trade. Corn was choppy with a downside bias. Outside markets are price-supportive, with front-month crude oil futures more than $1.50 higher and the U.S. dollar index nearly 100 points lower. Key during daytime trade will be fund money flow amid a fundamental focus on the Black Sea grain deal and weather.
Ukrainian officials say Russia has effectively stopped the Black Sea grain deal by refusing to register incoming vessels. Ukraine says 90 ships, including 62 vessels for loading, were waiting in Turkey’s territorial waters for approval to go to Ukrainian ports. Russia remains unsatisfied with how the issue of its agricultural exports as part of the Black Sea grain deal is being resolved. The Kremlin said on Saturday Russian President Vladimir Putin had not yet responded to proposals from UN Secretary-General Antonio Guterres on how to extend and improve the deal. Officials from Russia, Ukraine, the UN and Turkey are scheduled to meet this week as they try to work out a deal to extend the Black Sea grain deal beyond its May 18 deadline.
World Weather Inc. says all major crop areas will receive some rainfall during the next 10 days, though amounts will be lightest across the eastern Midwest and Southeast. Temps will remain above normal across the Plains and western Corn Belt.
USDA will update planting and emergence progress, along with winter wheat conditions this afternoon.
As the week progresses, traders will position for USDA’s May crop reports on Friday. USDA will update U.S. old-crop ending stocks and global production, along with the first look at its 2023-24 balance sheets.
CORN: July corn futures firmed overnight, while other contracts slipped. The contract is trading above the 5- and 10-day moving averages but below the intermediate and long-term averages. A push above the psychological $6.00 mark would make the 20-day moving average at $6.10 bulls’ next target. Near-term support is at the 10-day moving average at $5.91 1/4 and the 5-day average at $5.90 1/2.
SOYBEANS: July soybean futures tested the 20-day moving average at $14.45 overnight but failed to sustain trade above that level. It will serve as initial resistance, followed by the 40-day average at $14.50 1/2. Near-term support is in the $14.25 to $14.20 range.
WHEAT: July HRW wheat futures sharply extended last week’s strong corrective rebound overnight. The contract is now trading solidly above the 5-, 10-, 20-, 40-, 50- and 100-day moving averages. Next resistance is the 200-day moving average around $8.68 1/2. Near-term support extends from $8.34 1/2 to $8.24 3/4.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open the week with a mixed tone. This will be a key week for the cattle market. Bulls must defend support at last week’s lows or there will be an even deeper corrective pullback, despite futures trading well below the cash market. While cash cattle prices have posted seasonal tops, the discount in futures seems overly pessimistic. Choice boxed beef prices slipped 33 cents on Friday, while Select firmed 67 cents. Movement was light at 89 loads. The key demand period from Memorial Day through the Fourth of July lies ahead for beef, so traders will more closely monitor wholesale prices and movement.
HOGS: Lean hog futures are expected to open with a mostly lower tone on followthrough selling after a poor close on Friday. While the market is nearing short-term oversold status, the path of least resistance is down. The CME lean hog index is up another 29 cents to $74.53 (as of May 4), extending its recent uptick in price. Meanwhile, the premium in May lean hog futures, which expire on Friday, was down to just under $1.00 at the end of last week. June hogs, which will assume lead-month status, finished last Friday $9.245 above today’s cash quote. The pork cutout value firmed $1.75 on Friday, though movement totaled only 219.1 loads.