GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 7 to 10 cents higher.
Wheat: Winter wheat 14 to 16 cents higher; HRS 12 to 14 cents higher.
GENERAL COMMENTS: Corrective buying was featured across the grain and soy markets overnight, with each going into the break near session highs. Outside markets are favorable this morning as the U.S. dollar index is sharply lower as the annual inflation rate, measured by the Consumer Price Index (CPI), fell to the lowest mark in a year at 3%. That was below expectations of 3.1% and well below a month ago at 3.3%. Core CPI fell to 3.3%, a three-year low. Lower inflation has given traders confidence that the Fed will cut rates in their September meeting. Front-month crude oil futures are trading modestly higher today as well.
Strategie Grains increased its forecast for EU soft wheat production by 500,000 MT to 122.3 MMT, though that would still be down 4.2 MMT (3.3%) from last year and the lowest in four years. The firm said the latest harvest feedback and area estimates from France, the EU’s largest wheat producer, suggest soft wheat production could fall below 29 MMT. That would be below the initial forecast of 29.7 MMT earlier this week from France’s ag ministry. Strategie Grains raised EU barley and corn production forecasts to 51.3 MMT and 62.0 MMT, respectively.
Ukraine seized a foreign cargo ship in the Black Sea off its Odesa region and detained the captain on suspicion of helping Moscow export Ukrainian grain from Russian-occupied Crimea, the Security Service of Ukraine (SBU) said. The vessel, which it did not identify, was travelling under the flag of a central African country and repeatedly docked at the Crimean sea port of Sevastopol to pick up “looted” agricultural products in 2023-24, SBU said. SBU said the captain and 12 crew members helped Russia export Ukrainian grain taken from the occupied south to the Middle East for sale on behalf of Russia.
NATO issued a declaration on Wednesday night calling out China’s military support for Russia in Ukraine. The declaration described China as a “decisive enabler” of Russia’s war against Ukraine. China on Thursday criticized the claim, saying it “comes with malicious intent.” China’s foreign ministry urged NATO to “take concrete action to de-escalate rather than shift blame” in the situation.
Export sales for the week ended July 4:
- Corn: Net sales of 538,300 MT for 2023-24, up 51% from the previous week but down 13% from the four-week average. Increases came primarily for Colombia, Japan and Mexico. Traders expected sales from 300,000 to 850,000 MT for 2023-24. Exports of 879,100 MT.
- Soybeans: Net sales of 208,000 MT for 2023-24, down 9% from the previous week and 40% from the four-week average. Increases came primarily for the Netherlands, Mexico and Egypt. Sales came in the lower end of expectations from 200,000 to 600,000 MT for 2023-24. Exports of 267,300 MT.
- Wheat: Net sales of 240,400 MT for 2024-25, less than a third of the previous week. Increases came primarily for Thailand and Japan. Sales came in below expectation of 300,000 to 700,000 MT for 2024-25. Exports of 294,600 MT were down modestly from a week ago.
CORN: December corn futures rebounded overnight. Initial resistance and the June 28 low of $4.12 limited most gains overnight. Further buying targets the 10-day moving average at $4.19 1/4. Support stems from yesterday’s close of $4.07 1/4 then the recent for-the-move low of $4.04.
SOYBEANS: November soybean futures saw modest profit taking overnight. Prices marked a fresh for-the-move low before rebounding, which will mark initial support at $10.66. Further selling eyes support at $10.50. Resistance stems from $10.75, with strong resistance coming in at the 10-day moving average, currently at $10.97.
WHEAT: December SRW futures saw strong corrective gains overnight. Gains stopped short of psychological $6.00 resistance, which will remain an important pivot today. Further buying eyes resistance at the 20-day moving average at $6.15 1/4. Support stems from $5.94 1/2 then yesterday’s low of $5.80 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, driven by technical buying, as prices continue to find support at the uptrend from the April low. A sinking cash market could limit buying interest after the open. Cash trade began early this week at sharply lower prices, likely due in part to the selloff in futures on Monday and Tuesday. Still, August futures hold a substantial discount to this week’s cash average of $188.36. Wholesale beef declined for the second consecutive day on Wednesday, as Choice cutout fell $1.61 to $324.05 and Select sunk 37 cents to $303.94. USDA reported net beef sales of 8,300 MT for 2024 — a marketing-year low, down 46% from the previous week and 43% from the four-week average.
HOGS: Lean hog futures are expected to open lower on a continuation of selling pressure from Wednesday’s large drop. Modest strength in the CME lean hog index, which is up 24 cents to $88.67 as of July 9, could limit selling pressure after the open. July lean hog futures, which expire July 15 and cash settle against the index on July 17, finished Wednesday 22 cents below the index. The August contract prices in sustained weakness in the cash market in the coming month. Wholesale pork ended Wednesday modestly higher, rising 57 cents to $94.32. USDA reported net pork sales of 26,500 MT for 2024, down 55% from the previous week and 29% from the four-week average.