GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: SRW 8 to 10 cents lower; HRW 13 to 15 cents lower; HRS 11 to 13 cents lower.
GENERAL COMMENTS: Corn and wheat favored the downside overnight while soybeans saw action on both sides of unchanged. Positioning is likely to drive trade ahead of today’s USDA reports. Outside markets are favorable this morning as front-month crude oil futures continue to extend to the upside and the U.S. dollar index is trading around 150 points lower.
Producer Price Inflation (PPI) came in hotter than expected this morning, contrary to weaker consumer inflation seen on Thursday. Factory gate prices in the U.S. increased 0.2% month-over-month in June, following an upwardly revised 0.1% rise in May and above expectations of 0.1%. The increase in PPI was despite a 5.8% decline in gasoline prices. Core PPI rose 3.0% year-over-year, sharply above expectations of 2.5%. While CPI was cooler than expected, hot inflation in producer prices could limit the Fed’s willingness to cut rates in the near-term.
USDA’s updated balance sheets at 11:00 a.m. CT will reflect adjustments to old-crop demand forecasts based on June 1 stocks. There will be major changes on the new-crop balance sheets to reflect planted acreage figures. The first all-wheat crop estimate will include the initial survey-based forecasts for other spring wheat and durum. Analysts expect 2023-24 ending stocks of 2.049 billion bu. for corn (2.022 billion bu. in June), 355 million bu. for soybeans (350 million bu. in June) and 702 million bu. for wheat (688 million bu. in June). For 2024-25 ending stocks, analysts expect: 2.312 billion bu. for corn (2.102 billion bu. in June), 449 million bu. for soybeans (455 million bu. in June) and 788 million bu. for wheat (758 million bu. in June). Analysts expect the all-wheat production estimate to be 1.909 billion bu. (1.875 billion bu. projected in June).
China’s ag ministry kept its estimates unchanged for corn, soybean and cotton production and imports for 2024-25. China’s wheat production increased 2.7% this year to 138.22 MMT as planted area inched up 0.1% and yields rose 2.6%.
China imported 11.11 MMT of soybeans during June, up 890,000 MT (8.7%) from May and 840,000 MT (8.2%) more than last year. Through the first half of 2024, China imported 48.48 MMT of soybeans, down 2.2% from the same period last year. Soybean arrivals in China are expected to be record-large between 12 MMT and 13 MMT this month.
CORN: December corn futures continue to consolidate near recent lows. Strength above resistance at $4.13 1/4 targets the 10-day moving average at $4.17. Support lies at $4.04 then the psychological $4.00 mark.
SOYBEANS: November soybean futures traded on either side of unchanged overnight. Bulls are seeking to overcome resistance at $10.75 then the 10-day moving average at $10.90 3/4 on report driven strength. Continued selling pressure finds support at $10.61 1/2 then the psychological $10.50 mark.
WHEAT: December SRW futures reversed lower overnight on low volume. Initial resistance lies at $5.95, which is backed by yesterday’s high of $6.03 1/2. Support lies at $5.85 then the June 26 low of $5.79.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone as technical buying persists. Prices have rested on trendline support for three consecutive sessions as bulls keep the uptrend stemming from the April lows intact. Cash cattle trade rebounded on Wednesday, with this week’s five-area average now totaling $192.88, up from $188.36 the previous day. That relative strength could support futures today given their big discount to the cash market. Wholesale beef continues to face weakness, with Choice falling $2.40 to $321.65 and Select dipping 56 cents to $303.38 on Thursday.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as technical selling is likely to continue. August futures saw strong gains on Thursday, though prices remain in a downtrend as traders remain pessimistic about the cash pork outlook. The CME lean hog index is down 2 cents to $88.65 as of July 10. If the index continues to stabilize, it could draw buyers to futures, which remain at a discount to the index. Pork cutout firmed $1.81 to $96.23 Thursday, driven higher by a $12,56 jump in ribs. Movement remains quite firm, totaling 329.06 loads yesterday.