GRAIN CALLS
Corn: 5 to 7 cents higher.
Soybeans: 15 to 20 cents lower.
Wheat: 7 to 20 cents lower.
GENERAL COMMENTS: Corn futures climbed near a three-week high overnight and wheat also rose amid concerns over extreme heat in key U.S. and European growing areas. Soybeans fell. Malaysian palm oil futures sank to a 10-week low as Indonesia readied to accelerate exports. Front-month U.S. crude oil futures are down around $2. U.S. stock index futures signal an extension of last week’s sharp losses, while the U.S. dollar index is more than 500 points higher this morning.
Heat advisories are in effect for the central U.S. today and tomorrow with temps expected to soar near 100 degrees Fahrenheit in some areas of the Corn Belt, though there will be some rain activity in northern areas early this week before a high-pressure ridge moves in late-week. Soil moisture should be ample to avoid crop stress, but there will be a need for rains in some areas by late June/early July.
The closely watched Treasury yield curve inverted for the first time since early April as the U.S. two-year yield exceeded the 10-year on concerns aggressive rate hikes will lead to an economic slowdown. Concern has been mounting that surging inflation will require more rapid policy tightening by the Fed, which in turn will reduce consumer spending and business activity.
Some of the biggest U.S. food suppliers and restaurants, such as Kraft Heinz Co. and some McDonald’s Corp. franchises say they plan to keep on raising prices to offset starkly higher costs, the Wall Street Journal reported. The food industry has been hit by cost increases for labor, packaging, ingredients, energy and transportation. Besides raising consumer prices, the companies have tried selling smaller packages, raising the per-unit price and improving their operations’ productivity.
Farmers have started harvesting winter grains in the southwestern Odesa region of Ukraine, according to regional officials. Farmers in the region are expected to harvest 1.06 million hectares of winter grains, including 551,000 hectares of winter wheat and 244,0000 hectares of barley. Ukraine’s ag ministry says spring planting across the country is completed. The ministry previously said farmers planned to sow 14.2 million hectares of spring grains, down from 16.9 million hectares in 2021, due to the war. The ag ministry provided no crop outlook.
Malaysian palm oil futures extended a slump as Indonesia, the world’s biggest exporter of palm oil, has yet again reversed its export policy, looking to accelerate shipments just weeks after ending a three-week export ban aimed at maintaining domestic supply. The country has issued export permits for 1.16 MMT of palm oil products under a program to accelerate shipments, a trade ministry official said. Meanwhile, Malaysia should see slower exports in June and higher inventories as trade flows shift back to Indonesia, although Jakarta might still control shipment volumes as it seeks to secure domestic cooking oil supplies, analysts said.
Iraq plans to sign contracts this week to import 1.5 MMT of wheat from the U.S. and Australia, Mohamed Hanoun the general manager of state grains board told local newspaper Al-Sabah on Sunday. The Iraqi News Agency cited a statement issued by the Ministry of Trade earlier explaining the country is moving forward to allocate 2 MMT of wheat as a strategic stockpile for six months.
India, the world’s biggest rice exporter, has ample stocks of rice and there is no plan to restrict exports, the country’s food minister said. There has been speculation the country could ban rice exports after earlier restricting wheat shipments
CORN: July corn futures overnight touched $7.82 1/4, just 1/2 cent under last week’s high, before fading slightly. The lead contract, which surged 46 1/4 cents last week for the contract’s first weekly gain in six, faces resistance at the 40-day moving average at about $7.81 3/4, which the contract hasn’t closed above since May 23. USDA will update crop condition ratings after the close.
SOYBEANS: July soybeans overnight fell as low as $17.22 1/2 after gaining nearly 48 cents last week, the contract’s fourth weekly gain in the past five. November soybeans fell as low as $15.40 1/2. Focus this week will center on planting progress and Midwest weather.
WHEAT: July SRW wheat overnight rose as high as $10.93 1/2 after gaining 30 3/4 cents last week. July HRW wheat rose to $11.83 after rising 41 1/2 cents last week. Traders will watch for USDA’s winter wheat harvest progress update later today.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weak
CATTLE: Live cattle may see some followthrough from last week’s sharp gains but upside may be limited by skepticism cash strength will be sustained. USDA-reported live steers averaged $140.52 last week through Friday morning, up almost $2.50 from the previous week’s average. Choice beef cutout values ended the week at $271.31, up from $267.26 at the end of last week. Seasonals suggest the cash advance will be short-lived, and front-month live cattle trading below the cash market suggests traders will take a cautious approach. August live cattle dropped $1.10 cents Friday to $136.20, up $2.35 for the week. August feeder futures tumbled $1.55 to $174.475.
HOGS: Lean hog futures may start the week under pressure on growing beliefs a recent cash upswing has ended. The CME lean hog index is down 12 cents to $107.19 (as of June 9), the third straight daily decline. Based on the discounts in July and August hogs, traders sense the cash market has topped seasonally. Unless those attitudes change, traders are likely to be comfortable with small discounts in summer-month contracts. July lean hogs rose 47.5 cents Friday to $105.475, down $5.275 for the week. Pork cutout values ended last week at $109.16, down from $112.02 a week earlier.