Ahead of the Open | June 14, 2024

Corn, soybeans and wheat each favored the downside overnight, giving up a portion of Thursday’s gains.

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

GRAIN CALLS

Corn: 1 to 3 cents lower.

Soybeans: 2 to 4 cents lower.

Wheat: Winter wheat 4 to 6 cents lower; HRS steady to 2 cents lower.

GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside overnight, giving up a portion of Thursday’s gains. Outside markets are mixed this morning, as front-month crude oil futures continue to consolidate near recent highs and the U.S. is trading over 425 points higher and at five week highs.

U.S. purchases of Brazilian beef tallow climbed 377% versus year-ago in the first four months of 2024, accounting for nearly all of the 40% increase in overall tallow imports during that period. U.S. biofuels makers are turning to cheaper overseas waste fat and used cooking oil (UCO) to produce biofuels. “As long as the rules are the way they are these biofuel companies are going to use whatever is cheapest,” John Baize, an independent analyst who also advises the U.S. Soybean Export Council, told Bloomberg. A bigger federal tax credit will also start next year, with tallow and used cooking oil generally more lucrative feedstocks than U.S.-based soyoil.

Ukraine’s ag ministry raised the country’s grain production forecast to 56 MMT, including 28.5 MMT of corn, 21 MMT of wheat and 5 MMT of barley, up 3.6 MMT from its prior outlook. The ministry forecasts oilseed production at 22 MMT, including 13 MMT of sunflower seeds, 4 MMT of rapeseed and a record 5 MMT of soybeans. The ministry expects Ukraine to export 43 MMT of grain in 2024-25, including 25 MMT of corn and 15 MMT of wheat, and 17 MMT of oilseeds and oilseed products.

A new Iowa fertilizer plant opens in Boone. The $15 million, 75,000-square-foot fertilizer facility, owned by Landus Cooperative, aims to lower costs for local farmers, reduce greenhouse gas emissions, and support local businesses. The facility’s construction was partially funded by a $5 million grant from USDA, as part of a federal initiative to expand domestic fertilizer production. Besides producing fertilizer, the facility will create adjuvants and soil products and store millions of bushels of corn, other grains and soybeans. It also features a green ammonia production section in partnership with TalusAg, which helps reduce the facility’s carbon footprint without requiring operational changes from farmers.

Leaders of the Group of Seven (G7) wealthy democracies vowed to “continue to take actions to protect our businesses from unfair practices, to level the playing field and remedy ongoing harm,” by China, according to a draft summit statement. They also called on China “to refrain from adopting export control measures, particularly on critical minerals.”

Some rain fell along portions of the southern Corn Belt Thursday, while most other areas were dry, says World Weather Inc. The southwestern to eastern Corn Belt will see little rain and will be warm over the next ten days to two weeks, though current soil moisture should maintain favorable crop development. The western Corn Belt will likely see regular rain over the coming week.

CORN: July corn futures saw profit-taking overnight. Initial resistance stands at the 100-day moving average, currently at $4.59 1/2, which capped gains Thursday. Additional buying finds resistance at $4.61 1/2. Support stems from the 40-day moving average at $4.53 1/2 then Wednesday’s low at $4.48 1/2.

SOYBEANS: July soybean futures’ range continues to tighten. Bulls are seeking to overcome initial resistance at $11.88 3/4 before tackling firmer resistance at this week’s high of $11.93. Initial support comes in at $11.75 and is reinforced by support at $11.66 3/4.

WHEAT: July SRW futures continue to consolidate in an apparent bear flag formation on the daily bar chart. Resistance stems from $6.26 1/2 and is backed by this week’s high of $6.33. Support comes in at $6.07 1/2 and is reinforced by $5.99 1/4.

LIVESTOCK CALLS

CATTLE: Higher.

HOGS: Choppy/lower.

CATTLE: Live cattle futures and feeders are expected to open higher in a continuation of yesterday’s strength. Cash cattle trade developed Thursday in the Southern Plains at $1.00 to $2.00 higher prices than last week. Some feedlots in the Southern Plains and most in the northern market continued to pass on those bids in hopes of even stronger prices. Expectations are for stronger cash trade to develop today. Wholesale beef price rebounded as Choice cutout marked a fresh for-the-move high, rising 71 cents to $318.31. Select firmed 32 cents to $299.25 on Thursday. Movement remained firm at 129 loads.

HOGS: Lean hog futures are expected to open with a mostly weaker tone as wholesale pork prices are breaking down. While the CME lean hog index has halted its recent slide and is up another 20 cents to $91.58 as of June 12, sinking pork cutout prices could spark demand concerns, especially with movement slowing. Pork cutout dropped $1.99 to $97.02 on Thursday, led lower by steep declines in bellies and ribs. That marks the lowest quote since April 23. Movement slowed to 271.1 loads. Corrective buying could limit losses after the open as futures continue to be short-term oversold on the daily bar chart.