GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 14 to 17 cents lower.
Wheat: SRW 10 to 12 cents lower; HRW 14 to 16 cents lower; HRS 13 to 15 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat saw resurgent selling pressure overnight though saw a modest increase in buying pressure into the break. Front-month crude oil futures are trading at the lowest mark in a month and a half while the U.S. dollar index is trading over 200 points higher and near the highest mark in more than two weeks.
USDA rated 68% of the corn crop as “good” to “excellent” and 9% “poor” to “very poor.” The soybean crop was rated 67% “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 improved 1.3 points to 374.8, while the soybean crop slipped 0.6 point to 366.3. USDA rated 74% of the spring wheat crop as “good” to “excellent” and 4% “poor” to “very poor.” On the CCI, spring wheat dropped 1.3 points to 382.7. Click here for details.
Crop Consultant Dr. Michael Cordonnier left his corn yield and production forecasts at 181.5 bu. per acre and 14.97 billion bu., respectively, noting July was generally favorable for corn pollination. He kept his soybean yield and production estimates at 52 bu. per acre and 4.39 billion bu., respectively, saying August weather must remain favorable to achieve strong yields.
The Wall Street Journal reports manufacturers are responding by laying off employees and reducing production to manage falling orders and rising inventories. Deere has reduced its hourly workforce by about 15% since November and is cutting production to avoid excess inventory. Agco plans to cut 6% of its global salaried workforce by year-end. Polaris is reducing shipments to dealers as discretionary spending declines. Higher interest rates, rising operating costs, a stronger U.S. dollar and lower commodity prices are contributing to the slowdown in factory activity nationwide. This deceleration follows pandemic-induced supply imbalances and rapid shifts in consumer demand.
CORN: December corn futures saw resurgent selling pressure overnight. Initial resistance stands at $4.12 1/2 with further strength seeking to overcome the 20-day moving average at $4.17 1/2. Support lies at yesterday’s low of $4.05 1/2 then the July 12 for-the-move low at $4.03.
SOYBEANS: November soybean futures saw sharp selling pressure overnight. Resistance stems from the July 18 low of $10.31 3/4 then $10.40. Bulls are seeking to hold yesterday’s low of $10.18 which is further backed by support at $10.10.
WHEAT: December SRW futures negated Monday’s gain overnight. Bulls are seeking to overcome initial resistance at $5.50 before tackling the 10-day moving average at $5.60 3/4. Support lies at the contract low of $5.39 1/2 with little backing until $5.25.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on continued cash fundamental strength. Futures saw across-the-board selling on Monday despite rebounding cash market strength. Last week’s cash cattle average firmed $1.54 to $195.21 and wholesale beef has bounced from recent lows. Choice cutout firmed $1.04 to $314.81 yesterday while Select jumped $4.06 to $301.52. Still, packer cutting margins solidly in the red could disincentivize them from continuing to pay up for cash cattle, which will likely push trade late into the week.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on continued strength in the cash market, though a continuation of Monday’s selling pressure could limit gains after the open. The CME lean hog index is up another 44 cents to $92.29 as of July 26, matching the mid-May high and marking the 11th straight daily gain. Pork cutout firmed $1.61 to $106.78, the highest quote since mid-August 2023, led by gains in bellies, though all cuts except hams posted gains. Packer margins remain in the black, giving them incentive to keep raising cash prices.