Ahead of the Open | June 25, 2024

Corn, soybeans and wheat each favored the downside overnight, with soybeans negating most of Monday’s surge.

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

GRAIN CALLS

Corn: 5 to 7 cents lower.

Soybeans: 8 to 10 cents lower.

Wheat: SRW 3 to 5 cents lower; HRW steady to 2 cents lower; HRS 1 cent lower to 1 cent higher.

GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside overnight, with soybeans negating most of Monday’s surge. Markets have been persistently weak despite the USDA reports on Friday. Outside markets are unfavorable this morning as front-month crude oil futures are basing from yesterday’s gain and the U.S. dollar index is trading around 175 points higher.

USDA reported daily sales of 209,931 MT of corn for delivery to Mexico. Of the total, 22,098 MT is for 2023-24 with the remaining 187,833 MT for delivery in 2024-25.

Crop consultant Dr. Michael Cordonnier says there might be a half million to one million corn acres lost due to the excessively wet conditions and flooding in the northwestern Corn Belt. Those acres will be counted as planted but reflected in a lower harvested acreage percentage, which he believes will be 90.3% to 90.7% this year, down from an average of 91.3%. He says planting soybeans in late June or early July in the northwestern Corn Belt would be “a risky proposition,” as they would flower while the crop is in early development, “resulting in short-stature soybeans with a low yield potential.” For now, Cordonnier left his corn and soybean production forecasts at 14.62 billion bu. and 4.46 billion bu., respectively.

USDA rated 69% of the corn crop as “good” to “excellent” as of Sunday, down three percentage points from the previous week. That was in line with analysts’ expectations. USDA rated 67% of the soybean crop as “good” to “excellent,” down three points from last week and one point lower than analysts anticipated. USDA rated the spring wheat crop as 71% “good” to “excellent,” down five points from the previous week. Analysts expected a one-point decline.

Forecasts for a more moderate La Niña in coming months is good news for Argentina’s crops, which will now likely receive more rain than previously expected, the Rosario Grains Exchange said. It noted, “This is good news for rainfall in Argentina during the (Southern Hemisphere’s) spring and summer period.”

Much of the lower Midwest will see another hot day today while rain increases from the southwestern to the eastern Corn Belt today into Wednesday, says World Weather Inc. Enough rain is expected to at least induce temporary improvements to topsoil moisture and improve conditions for crops.

CORN: December corn futures saw sharp selling pressure overnight. Bulls are seeking to overcome initial resistance at the psychological $4.50 mark which is backed by $4.53 1/4 then the 10-day moving average at $4.59. Further selling finds support at yesterday’s low of $4.43 then $4.38 1/2.

SOYBEANS: November soybean futures negated much of Monday’s gain overnight. Resistance stands at $11.30 1/2 then the 10-day moving average at $11.35 1/2. Bulls are seeking to hold support at $11.16 3/4 then yesterday’s low at $11.11 1/2.

WHEAT: December SRW futures continue to undergo heavy selling pressure. Initial resistance stands at yesterday’s close of $5.94 1/4, which is backed by the psychological $6.00 mark, then $6.15. Support steams from Monday’s low of $5.89 then the March 15 low at $5.82.

LIVESTOCK CALLS

CATTLE: Higher.

HOGS: Choppy/lower.

CATTLE: Live cattle futures and feeders are expected to open higher on surging cash fundamentals. After posting a record two weeks ago, cash cattle prices surged another $2.29 last week to $194.84, an all-time high. Over the past two weeks, the cash price has surged $5.92. Wholesale beef prices firmed 25 cents for Choice to $322.64 and $1.96 for Select to $305.07 on Monday. Given hefty packer purchases of cattle recently and next week’s shortened slaughter schedule, cash sources expect prices to be steady at best this week, though futures continue to trade at hefty discounts to the cash market, which is likely to limit any selling pressure. USDA releases its monthly Cold Storage Report after the close today. The five-year average for May is a 30.4-million-lb. decline in beef stocks.

HOGS: Lean hog futures are expected to open with a mostly weaker tone as cash fundamentals continue to erode. The CME lean hog index is down another 42 cents to $89.90 as of June 21, marking six out of the last seven days with a decline and the lowest quote since April 10. July futures are trading nearly on par with the index and are likely to slip to a discount as pessimism over the current cash market persists. Wholesale pork dipped to the lowest mark since April as cutout fell $1.20 to $97.83, led lower by losses in loins and butts.