GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 11 to 14 cents lower.
Wheat: 2 to 5 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each traded lower in overnight trade, despite rebounding outside markets. Buying interest increased into the break, bulls are seeking to build on that strength after the open, similar to yesterday’s price action. Front-month crude oil futures are trading modestly lower and near recent lows while the U.S. dollar index is trading around 400 points higher.
Global stock markets were mostly higher overnight after Monday’s sharp plunges as fear-based selling eased. There are technical clues stock market bears may have run out of gas after a steep three-week downdraft. But this could be a “Turnaround Tuesday” pause and trading action the rest of this week will be extra important in determining if the big selloff has concluded. Geopolitically, worries about a broader Middle East war are still present as Israel is bracing for a major retaliatory attack from Iran and its proxies. The U.S. and its allies worked to head off an Iranian attack on Israel and avert a wider regional war.
Crop consultant Dr. Michael Cordonnier raised his U.S. corn and soybean yield forecasts 0.5 bu. each to 182 bu. and 52.5 bu. per acre, respectively, noting August started without any widespread problems and beneficial weather. That pushed his production estimates to 15.02 billion bu. for corn and 4.42 billion bu. for soybeans.
USDA rated 67% of the corn crop as “good” to “excellent” and 10% “poor” to “very poor.” The soybean crop was rated 68% “good” to “excellent” and 8% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop slipped 0.2 point to 374.6. The soybean crop improved 2.2 points to 368.5. Both crops remain rated well above year-ago at this time. USDA rated 74% of the spring wheat crop as “good” to “excellent” and 4% “poor” to “very poor.” On the CCI, spring wheat dropped 1.9 points to 380.8, though that was still 59.1 points (18.4%) above last year at this time. Click here for details.
Area planted to soybeans in Brazil will increase at a slower rate for 2024-25 than previous years as prices are near a four-year low, the president of farmers group Aprosoja Brasil said. Brazil’s soybean plantings rose 4.5% to 46 million hectares in 2023-24 after a 6% jump in 2022-23. “I don’t know if it (soybean expansion in 2024-25) will reach 1%,” the official said.
CORN: December corn futures saw resurgent selling pressure overnight. Initial resistance stems from the 10-day moving average at $4.06 1/4, with further strength looking to overcome $4.11 1/2. Prices held above initial support at $4.03, with further selling seeking to overwhelm support at $3.98 1/2.
SOYBEANS: November soybean futures gave up Monday’s gain overnight. Initial resistance stems from the 10-day moving average at $10.36 3/4, with further strength seeking to overcome downtrend line resistance at $10.50. Bulls are seeking to hold support at $10.25 then last week’s for-the-move low close of $10.16 1/2.
WHEAT: December SRW futures resumed lower overnight. Bulls continue to struggle against $5.65 resistance. Further buying seeks to overcome resistance at $5.73. Initial support stands at $5.55 1/2 with further selling finding support at $5.48 1/2.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open higher on sharp corrective buying. Cattle futures have traded alongside equity futures the past few sessions, facing liquidation pressure and quickly putting prices in oversold territory. October futures have lost $10.00 in less than two weeks and are trading well below the cash market. While the cash market is likely to slump, steep discounts could encourage traders to narrow that gap. Despite weakness in futures, wholesale beef prices surged on Monday, as Choice cutout jumped $4.17 to $317.94 and Select firmed $2.89 to $300.06.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as a stalling cash index dissuades bullish momentum. After rising for 15 consecutive days, the CME lean hog index is down a nickel to $93.59 as of Aug. 2. August futures stand at a $2.44 discount to today’s cash quote, indicating traders’ anticipation of the downtick of the index. Wholesale pork prices ended Monday down 3 cents to $104.28, amid a drop hams, despite all other cuts posting gains. Continued relative strength in cash fundamentals could limit selling after the open.