GRAIN CALLS
Corn: 3-5 cents lower
Soybeans: 4-6 cents higher
Wheat: HRS 8-12 higher; winter wheat mixed.
GENERAL COMMENTS:
Rains over the past 18 hours once again favored southern and eastern areas of the Corn Belt, with the dry northwest Corn Belt and Dakotas missing out. More heavy rains, flooding and severe storms are expected from Kansas to Indiana today, with heavy rain also possible on Saturday. The greatest rainfall is expected from western Missouri into Illinois, according to World Weather Inc. The National Weather Service has issued flash flood watches and warnings from southeast Nebraska/northeast Kansas through Indiana. World Weather says, “Rain in the U.S. Midwest is still expected to be widespread over the next 10 days with only the far northwestern Corn Belt and some areas in northwest into the northern Plains and Canada’s Prairies continuing to deal with dryness. No expansion of the dry bias is anticipated and the heart of the U.S. Midwest will be getting enough rain to restore favorable soil moisture for corn pollination next month.”
USDA announced daily soymeal sales totaling 122,200 MT to Mexico – 84,150 MT for 2021-22 and 28,050 MT for 2022-23.
AgroConsult lowered its safrinha corn crop estimate for Brazil to 65.3 MMT, a 900,000-MT decline from its May forecast. That dropped the consultancy’s total corn crop estimate from 91.1 MMT to 90.2 MMT.
The Buenos Aires Grain Exchange says early corn yields in Argentina continue to exceed expectations. It maintained its Argentine corn crop estimate of 48 MMT. Soybean harvest is basically complete, with the exchange pegging the crop at 43.5 MMT.
CORN: Corn attempted to firm overnight after the December contract bounced off the 100-day moving average on Thursday and finished in the upper end of the daily trading range. But buyer interest faded late in the overnight session, signaling a weaker open this morning. After a big washout of long positions, funds may take a breather ahead of the weekend, though they view weather as price-negative.
SOYBEANS: The soybean market firmed overnight on support from strong gains in soyoil and corrective buying. But the meal market remains weak, which could limit corrective buyer interest in soybeans this morning. November soybeans have consolidated within last Thursday’s broad range for what will be six sessions today. Last Thursday’s low at $12.40 1/2 is key near-term support.
WHEAT: Spring wheat futures led gains overnight, extending their recent price strength amid crop concerns. Forecasts offer little near-term rainfall chances for the Northern Plains and there’s a heat wave building in the PNW that will transition eastward and put more stress on the spring wheat crop. The highest close in the life of the September HRS contract at $8.15 3/4 could be challenged today, based on overnight trade. The contract high is 30 cents above the highest settlement level. Winter wheat futures will be torn between support from HRS contracts and weakness in corn.
CATTLE: Choppy to firmer
HOGS: Lower
CATTLE: Futures are expected to be lightly traded ahead of USDA’s Cattle on Feed Report this afternoon. The report is expected to show there were around 11.729 million head of cattle in big feedlots (over 1,000 head) as of June 1, which would be a 0.5% rise from year-ago. Compared with June 1, 2019 levels, the number of cattle on feed would down 11,000 head. Placements are expected to slide 4.6% from year-ago and 5.1% from two years ago. Marketings are expected to surge 23.4% from year-ago but be down 9.7% compared with May 2019 levels. This week’s cash cattle trade has ranged from $122 in the Southern Plains to as high as $126 in the northern market. Choice boxed beef continued to fall, dropping another $4.63 on Thursday, though the price remains elevated at $307.42.
HOGS: Hog futures are expected to face followthrough selling after sharp to limit-down losses in summer-month contracts yesterday. The market will have expanded $4.50 limit again today. While we expect followthrough selling, the market is oversold and due for a corrective bounce. July hogs finished yesterday $17.495 below where the cash index is quoted today (as of June 23). That’s a hefty discount, though the average national direct cash price fell $6.60 on Thursday. The pork cutout value was $5.17 higher, though most of that strength was tied to a $33.75 jump in bellies. Ribs, butts and picnics were all sharply lower on the day.
USDA’s Hogs & Pigs Report Thursday afternoon showed the U.S. hog herd down 2.2% from year-ago as of June 1. There was nothing in the data to greatly move the hog market. Though near-term slaughter numbers will be greater than anticipated based on heavyweight market hog inventories, the sharp price slide into the report could attract some corrective buying ahead of the weekend given the huge discounts summer-month futures hold to the cash market.