GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 16 to 18 cents higher.
Wheat: Winter wheat steady to 2 cents higher; HRS 5 to 7 cents higher.
GENERAL COMMENTS: Corn and soybeans led buying efforts overnight, though both stopped just shy of key technical resistance. Wheat rebounded early though went into the break near unchanged. Outside markets are mixed as front-month crude oil futures continue to breakdown and the U.S. dollar index is trading around 50 points lower.
USDA reported daily sales of 133,000 MT of corn for delivery to Mexico during the 2024-25 marketing year.
The western and northern Corn Belt will receive rains during the middle of the week with most other days being dry. The Delta, Tennessee River Basin and Southeast will be wet. The Southern Plains will receive some rainfall, while limited rains will be seen across the Central Plains. Temps will trend cooler than normal across the central U.S. this week, with more seasonal reading returning during the weekend and next week.
President Joe Biden announced on Sunday he will no longer seek the Democratic Party’s nomination. With Biden out of the race, the Democratic Party must officially name their nominee at the national convention in Chicago, beginning on Aug. 19. Biden has endorsed his running mate, Vice President Kamala Harris, for the nomination. However, other candidates could still challenge Harris for the nomination, potentially leading to a contested convention. Click here for more details.
The European Union is set to impose anti-dumping duties on Chinese biodiesel imports following an investigation into complaints that unfairly priced renewable fuel from China is harming EU producers and workers. The provisional tariffs, ranging from 12.8% to 36.4%, will be implemented in four weeks. This decision comes in response to concerns that Chinese companies may be mixing fuels with cheaper ingredients and mislabeling them to benefit from the EU’s renewable energy incentives.
The People’s Bank of China (PBOC) cut the seven-day reverse repo rate to 1.7% from 1.8%, the first reduction in nearly a year. PBOC also cut the one-year loan prime rate (LPR) – the benchmark for most household loans – by 10 basis points to 3.35%, and the five-year LPR rate – a reference for property mortgages – by 10 points to 3.85%. Additionally, PBOC said it will lower the collateral requirement for medium-term lending facility loans starting this month, with the intent of permitting banks to hold fewer longer-term bonds. The monetary policy measures came after Beijing’s long-term economic blueprint for China failed to inspire investor confidence (see next item) and were tied to PBOC’s resolve to rein in a bubble in bonds and steepen the yield curve.
CORN: December corn futures rebounded overnight. The 10-day moving average capped most gains overnight at $4.10 3/4. Further buying finds resistance at $4.16 1/2. Support lies at Friday’s close of $4.04 3/4 then the psychological $4.00 mark.
SOYBEANS: November soybean futures posted strong gains overnight. Gains stopped right at the 10-day moving average at $10.57 1/2, which will remain resistance. Further buying eyes resistance at $10.65. Bulls are seeking to hold support at the psychological $10.50 level, which is backed by $10.40.
WHEAT: December SRW futures saw modest gains most of the overnight session. Prices went into the break well off session highs. Bulls are seeking to overcome initial resistance at the 10-day moving average at $5.73 1/4, which is backed by the overnight high at $5.78 1/4. Support stems from $5.65 then the contract low close of $5.55 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone, supported by their discount to the cash market. After a weak start last week, cash cattle prices rebounded and are poised to post a modest drop from the previous week. Friday’s USDA Cattle on Feed Report was relatively neutral, as large feedlot inventories rose less than expected and both placements and marketings dropping more than anticipated. Wholesale beef prices ended Friday lower as Choice cutout sunk $2.32 to $313.83 and Select fell 66 cents to $298.80. Sinking packer cutting margins are likely to begin to weigh on cattle prices in the near future.
HOGS: Lean hog futures are expected to open higher on continued cash market strength. The CME lean hog index is up another 44 cents to $89.71 as of July 18, the fifth consecutive daily gain and the highest level since June 26. August futures finished Friday at a $1.865 premium to today’s cash quote. August futures may see limited upside as traders are concerned about building too much of a premium to the index, but recent gains in the cash market are difficult to ignore. Pork cutout was up $1.91 to $102.16 Friday, led by strength in ribs and loins, though all cuts except butts saw gains.