GRAIN CALLS
Corn: 1 to 4 cents lower.
Soybeans: 14 to 17 cents lower.
Wheat: 14 to 18 cents higher.
GENERAL COMMENTS: Corn and soybean futures fell overnight on expectations for rainfall and relief from extreme heat later this month. Wheat rose to the highest levels in over a week. Malaysian palm oil futures rose 3.3%, while front-month U.S. crude oil futures were down around $2. U.S. stock index futures signal a weaker open, while the U.S. dollar index rose for the first time in four sessions, up more than 100 points this morning.
USDA reported a daily soybean sale of 136,000 MT for delivery to China during the 2022-23 marketing year. This was the first daily soybean sales announcement since June 9.
The Central and Northern Plains, along with the southwestern Corn Belt, will receive relief from recent extreme heat and dryness gradually over the weekend and next week, World Weather Inc. said today. An initial round of rain will reach the Central Plains and southwestern Corn Belt Sunday into Monday. The heat break “will last about 10 days before the heat in Texas bubbles northward once again,” the forecaster said. “Northern and eastern Midwest locations will continue favorably moist with more rain and seasonable temperatures expected to support good crop development.”
Russian President Vladimir Putin expressed optimism after meeting with Turkey’s President Recep Tayyip Erdogan, who has taken on a role of middleman in Ukraine diplomacy and has been working to overcome a Russian blockade of Ukrainian grain. “Not all issues have been resolved yet, but the fact that there is movement is already a good thing,” Putin said.
Putin said Gazprom will restart gas supplies to Europe via the Nord Stream 1 pipeline on schedule Thursday — but at a drastically reduced capacity. Officially the pipeline is closed for maintenance. Some suspect Russia is manipulating gas flows as a political tool in retaliation for the EU’s support of Ukraine.
Jordan tendered to buy 120,000 MT of optional origin milling wheat.
CORN: December corn futures overnight fell as low as $5.88 after dropping 15 1/2 cents Tuesday to $5.95 1/4. Choppy price action may continue in coming days as traders watch Midwest weather developments and the crop’s pollination progress. Initial support is seen at Tuesday’s low of $5.83 and initial resistance at the 10-day moving average around $6.03 1/4.
SOYBEANS: November soybeans overnight fell as low as $13.37 1/2, the lowest intraday price since July 15, after tumbling 22 cents Tuesday to $13.58 1/4. Weakness in crude oil may further burden the soy complex, but fresh Chinese buying may limit declines. Further price weakness may have bears targeting last week’s low at $13.15 3/4.
WHEAT: September SRW wheat overnight reached $8.43 1/2, the contract’s highest intraday price since $8.69 1/2 on July 12. September HRW and spring wheat contracts also hit the highest levels in over a week. Prospects a deal may be reached to resume Ukraine grain exports may limit price upside.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-firmer
CATTLE: Live cattle futures may gain support as strength in wholesale beef, which indicates demand is performing better than expected amid growing recession concerns. Choice beef cutout values rose $2.02 Tuesday to $272.57, the highest since mid-April, on movement of 133 loads, the highest daily movement since July 12. The wholesale strength suggests demand concerns may have been exaggerated. August live cattle rose 10 cents Tuesday to $135.725. August feeder cattle rose $2.075 to $178.75.
HOGS: Lean hog futures may extend this week’s rally to three-month highs on continued strength in cash fundamentals. Pork cutout values jumped $3.16 Tuesday to $125.12, the highest since last August. Movement totaled 282.4 loads. The CME lean hog index not only extended its recent string of price strength, but today’s $1.02 gain (as of July 18) is the biggest daily advance in nearly a month. August lean hog futures rose 70 cents Tuesday to $112.825, the contract’s highest closing price since late April.
China’s sow herd at the end of June rose for the second consecutive month, reaching 42.8 million head, according to the country’s ag ministry. While that was up 2% from May, it was still down 6.3% from last year. Current live hog production is at a “normal and reasonable” level, an ag ministry official said. “Live hog and pork production will increase steadily in July and August... the supply of large hogs is guaranteed in the second half of the year,” the official noted.