Ahead of the Open | June 13, 2024

Corn futures led strength overnight, pulling wheat higher. Soybeans pivoted near unchanged most of the overnight session, though showed strength into the break.

Pro Farmer's Ahead of the Open
Pro Farmer’s Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 4 to 6 cents higher.

Soybeans: 2 to 4 cents higher.

Wheat: SRW 3 to 5 cents higher; HRW steady to 2 cents higher; HRS 3 to 5 cents higher.

GENERAL COMMENTS: Corn futures led strength overnight, pulling wheat higher. Soybeans pivoted near unchanged most of the overnight session, though showed strength into the break. Outside markets are unfavorable this morning, as front-month crude oil futures are facing profit taking from recent strength and the U.S. dollar index rebounded from sharp losses yesterday, currently trading around 200 points higher.

USDA reported daily export sales of 120,000 MT of soybeans for delivery to unknown destinations during the 2023-24 marketing year.

China’s ag ministry said record high temperatures have had an adverse impact on planting of crops. The ministry sent out several work groups to seven provinces to offer guidance in the fight against drought. China’s water resources ministry this week launched emergency responses to manage drought on in Gansu, Shaanxi, Shanxi, Henan and Shandong provinces, indicating various regions in the country spanning the northwest to the east are facing parched and scorching conditions.

Strategie Grains cut its EU wheat production forecast by 1.7 MMT to 121.8 MMT, which would be down 3.6% from year-ago and the smallest since 2020-21. The consultancy said it anticipated France would see the biggest year-over-year decline in production followed by Germany, Poland and Hungary. Strategie Grains also lowered its outlook for this year’s EU barley crop by 800,000 MT to 52.2 MMT.

CONAB updated their crop estimates for Brazilian corn and soybeans this morning. The agency raised their corn crop estimate to 114.144 MMT from 111.636 MMT previously, though that is still well below last year’s estimate of 131.893 MMT. The bulk of the increase came from expected safrinha production. CONAB modestly reduced their soy production estimate to 147.356 MMT from 147.685 MMT previously, still below last year’s record of 154.606 MMT. Both remain well below USDA, which has been the norm in recent years.

Export sales for the week ended June 6:

Corn: Net sales of 1.056 MMT for 2023-24, down 11% from the previous week but up 16% from the four-week average. Increases came primarily from Japan, Colombia and Mexico. Traders expected 700,000 MT to 1.25 MMT for 2023-24. Exports of 1.249 MMT were down 16% from the previous week but up 1% from the four-week average.

Soybeans: Net sales of 377,100 MT for 2023-24, up 99% from the previous week and 42% from the four-week average. Traders expected sales from 150,000 to 550,000 MT for 2023-24. Exports of 215,300 MT were down 45% from the previous week and 34% from the four-week average.

Wheat: Net sales of 223,900 MT for 2024-25 and carry over sales of 115,300 MT from the 2023-24 marketing year, which ended May 31. Traders expected sales from 250,000 to 600,000 MT for 2024-25. Mexico led purchases for new crop.

CORN: July corn futures extended higher overnight, leading strength. Bulls next target is overcoming resistance at the 100-day moving average, currently at $4.59 1/2, then downtrend line resistance stemming from the May highs at $4.62. Support stems from $4.56 1/4 and is backed by the psychological $4.50 mark.

SOYBEANS: July soybean futures pivoted near unchanged most of the overnight session. Prices are sitting near recent lows and strong support at $11.75, a break below which likely accelerates selling pressure, targeting support at $11.63. Bulls are seeking to overcome initial resistance at yesterday’s high of $11.86 1/2, which is quickly backed by the 10-day moving average at $11.88, then last week’s high of $12.05 1/2.

WHEAT: July SRW futures saw modest gains overnight. Bulls are seeking to overcome initial resistance at Tuesday’s close of $6.26 1/2 before tackling the 200-day moving average, currently at $6.31 1/2. Support stems from yesterday’s low of $6.10 1/2 and is backed by the for-the-move low at $6.05 1/2.

LIVESTOCK CALLS

CATTLE: Choppy/higher.

HOGS: Choppy/lower.

CATTLE: Live cattle and feeders are expected to open with a mostly firmer tone on technical buying, as August futures threatened uptrend support on Wednesday, which should support prices today. Cash cattle trade started in Nebraska on Wednesday at steady prices with last week, which is likely to give other feedlots confidence to hold out for at least steady bids, though trade was light. Firming packer margins could entice packers to oblige, as margins have been positive and building for the past week. Wholesale beef ended Wednesday lower, as Choice cutout fell 61 cents to $317.60 and Select dropped $1.69 to $298.93, though movement remained firm at 124 loads. USDA reported net beef sales of 12,000 MT for 2024, which were down 17% from the previous week and 28% from the four-week average.

HOGS: Lean hog futures are expected to open with a mostly weaker tone, resuming the recent downtrend. Prices are consolidating in a bear flag on the daily bar chart, which could lead to continued selling pressure. But corrective buying could limit losses after the open. The CME lean hog index is up 6 cents to $91.38 as of June 11, ending a four-day skid that dropped prices 74 cents. June hogs maintain a modest 64.5 cent premium above today’s cash quote, while the July contract holds a $2.32 premium, as of yesterday’s close. Pork cutout plunged $4.64 to $99.01 on Wednesday, led by a $19.02 drop in bellies, though all cuts except butts and picnics posted losses. USDA reported net pork sales of 30,100 MT for 2024, up 1% from the previous week but down 1% from the four-week average.