GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 5 to 7 cents higher.
Wheat: SRW 3 to 5 cents lower; HRW 3 to 5 cents higher; HRS 4 to 6 cents higher.
GENERAL COMMENTS: Soybeans led strength overnight, corn traded in a narrow range overnight and wheat futures were widely mixed, with SRW leading to the downside and HRS leading to the upside. Outside markets are relatively quiet this morning, as front-month crude oil futures are facing modest selling pressure and the U.S. dollar index is trading around 110 points lower.
With EPA Administrator Michael Reagan appearing twice this week before congressional panels, earlier predictions that updated news about the model used to implement the Sustainable Aviation Fuel (SAF) program was at hand proved true. Word is the info will come Tuesday. Of note, USDA Secretary Tom Vilsack says the coming info is just a “placeholder” for likely further changes ahead. That is code for some producers may not like the coming news.
Both the House and Senate are in session this week as hearings on fiscal year 2025 accelerate with a host of Biden administration officials testifying. Chief U.S. Ag Trade Negotiator Doug McKalip today will address a meeting of the National Farm Broadcasting (NAFB), which will likely see him face questions on the U.S./Mexico dispute over GMO corn, the dairy battles with Canada and overall agricultural trade issues. The economic focus will be on the Federal Reserve’s monetary policy meeting, which concludes on Wednesday. No changes to monetary policy are expected, but traders will closely monitor the post-meeting statement and Fed Chair Jerome Powell’s comments for clues to when rate cutting may commence. Employment data for April will be released on Friday.
Brazil’s grain exports will pick up in the second half of this year amid ample supplies, Cargill’s Brazil President Paulo Sousa said, though he did not predict actual volumes. Sousa said the soybean production estimate may be revised upward, as his company feels the crop “is not that much worse than last year.” For safrinha corn, Sousa noted: “The second-corn crop is not going to be a record like last year, but it is looking very good.”
Heavy rains fell across areas of the Corn Belt and Plains during the weekend. World Weather Inc. says the weather pattern will remain wet over the next week to 10 days with field ponding and localized flooding in some areas, resulting in fieldwork delays. Still, the rain induced important increases in soil moisture in the drier areas in the western Corn Belt.
CORN: July corn futures continued in a tight sideways range overnight. Initial resistance stands at $4.52 1/2, which is quickly backed by last week’s high of $4.54 1/4, then $4.60. Initial support comes in at $4.47-$4.48, the converged 10-day, 20-day and 40-day moving averages, with significant backing from $4.40.
SOYBEANS: July soybean futures led strength overnight. Bulls initial target is overcoming 40-day moving average resistance at $11.88 3/4. Further buying targets solid resistance at $11.95, then the psychological $12.00 mark. Bulls are seeking to hold support at $11.80 1/2 then $11.77 3/4 on a reversal lower, with firm backing from $11.72 1/2.
WHEAT: July SRW futures gapped lower on the overnight open, though have since slightly recovered. Bulls are seeking to overcome initial resistance at $6.22 1/4 before tackling the 200-day moving average at $6.25 3/4. Further buying targets Friday’s high of $6.33 1/4. Bulls are seeking to hold support at $6.09 1/2 then the 10-day moving average at $5.99 on continued corrective selling.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone, building on last week’s strength in the cash cattle market. After falling for four consecutive weeks, last week’s cash cattle average strengthened, with trade through last Friday morning $1.33 higher than the prior week’s average on impressive movement. Wholesale beef movement has been robust as well, with a string of days totaling more than 100 loads, indicating retailers are likely actively purchasing beef for Memorial Day features. Despite strong movement, packers have struggled to firm wholesale prices even while curbing production. Choice cutout rose 22 cents to $297.14 on Friday, while Select fell 94 cents to $288.72.
HOGS: Lean hog futures are expected to start the week with a modestly firmer tone, though continued selling pressure could limit gains after the open. The recent downturn in the CME lean hog index, which is 55 cents lower to $90.88 as of April 25, has led to heavy selling pressure on futures the past couple of sessions. Still, June futures closed Friday on longer-term uptrend line support, which could help start the week with a firmer tone. We do not expect recent weakness to persist in the cash market as retailers actively purchase pork for Memorial Day features, which coincides with a seasonal decline in hog supplies. Wholesale pork prices ended Friday modestly higher, rising 14 cents to $97.63, led by loins and bellies, though a sharp decline in hams limited gains.