GRAIN CALLS
Corn: 5 to 9 cents lower.
Soybeans: 5 to 9 cents lower.
Wheat: 1 to 7 cents lower.
GENERAL COMMENTS: December corn futures fell to a three-month low overnight and soybeans and wheat also eased in narrow-range trading ahead of USDA’s Acreage and quarterly Grain Stocks reports later this morning. Malaysian palm oil futures fell 0.2%, posting the market’s biggest monthly drop since October 2008 on pressure from weak exports. Front-month crude oil futures are about 40 cents lower. U.S. stock futures signal a weaker open, while the U.S. dollar index is about 200 points this morning.
USDA will release its Acreage and Grains Stocks Reports at 11 a.m. CT. Based on a Reuters poll, analysts expect USDA to estimate plantings at 89.861 million acres for corn (89.490 million in March), 90.446 million acres for soybeans (90.955 million), 47.017 million acres for wheat (47.351 million) including 10.844 million acres of spring wheat (11.200 million) and 12.194 million acres for cotton (12.234 million). June 1 stocks are expected to total 4.343 billion bu. for corn (4.111 billion bu. on June 1, 2021), 965 million for soybeans (769 million bu.) and 655 million bu. for wheat (845 million bu.).
Low soil moisture remains in parts of the U.S. Midwest and timely rain will be extremely important over the next couple of weeks, World Weather Inc. said. “Most forecast models are offering some timely rain, but its distribution may not be ideally suited, leaving some areas drier biased while others get a little boost in moisture. Second week rainfall potentials seem higher than those in this first week, but confidence is low. No excessive heat is expected for the next couple of weeks.”
A deal to end Russia’s blockade of Ukrainian seaports and grain exports remains distant because Moscow is using talks to push its ambition to dominate the Black Sea, Kyiv’s top negotiator said. Turkey and the United Nations are trying to broker an end to Russia’s naval blockade in the Black Sea. But Taras Kachka, Ukraine’s deputy minister for the economy and lead trade negotiator, said Russia’s efforts to conquer the country’s south were preventing a deal and rumors of a breakthrough were “more optimistic than reality… If there are talks, we will participate. But that doesn’t mean we will agree to any option that is on the table,” Kachka said.
An Argentine trucker strike threatens grain exports. The provincial Road Safety Agency said truckers protesting high diesel prices and shortages prevented the passage of trucks on roads in Santa Fe, home to port city Rosario, which ships around 80% of the country’s ag exports. More than 80% of grains bound for export are transported by trucks in Argentina.
Indonesia is considering expanding the mandatory palm oil mix in its biodiesel to 35%, which would be up five percentage points from the current level, a government official said, as authorities look for ways to stimulate palm fruit purchases from farmers after a slowdown in exports.
South Korea purchased 136,000 MT of corn to be sourced from the U.S., South America or South Africa. Egypt purchased 815,000 MT of wheat, including 350,000 MT French, 240,000 MT Romanian, 175,000 MT Russian and 50,000 MT Bulgarian.
CORN: USDA reported net weekly U.S. corn sales of 88,800 MT for 2021-22, down 87% from the previous week, down 72% from the average for the previous four weeks and a marketing-year low. For 2022-23, net sales totaled 119,300 MT for 2022/2023. The sales fell short of expectations for 2021-22 ranging from 200,000 to 700,000 MT and were at the low end of 2022-23 expectations from 100,000 to 500,000 MT for 2022-23.
December corn overnight pushed under Monday’s low and dropped as low as $6.43 3/4, the new-crop contract’s lowest intraday price since $6.31 on March 29.
SOYBEANS: USDA reported net weekly sales reductions of 120,200 MT for 2021-22, down from 29,300 MT the previous week and a marketing-year low. For 2022-23, net sales totaled 127,600 MT, primarily for “unknown destinations,” at 70,000 MT. Expectations ranged from negative 100,000 MT to 100,000 300,000 MT for 2021-22 and 100,000 to 500,000 MT for 2022-23.
WHEAT: Net weekly U.S. wheat sales for 496,700 MT for 2022-23, up from 477,800 MT the previous week and at the high end of trade expectations ranging from 200,000 to 600,000 MT.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle may face followthrough from Wednesday’s drop to four-week lows on concern over beef demand and signs of eroding cash prices. Cash cattle sources reported trade in the $137 to $141 range in the Southern Plains, with bids around $232 in the northern dressed market. Those prices are generally steady to firmer compared with last week. But USDA-reported live steers averaged $140.66 through Wednesday morning, down nearly $4 from last week’s average. August live cattle futures remain well below the cash market, signaling traders sense cash prices will soften through summer. Choice beef cutout values fell $2.26 Wednesday to $264.88 on movement of 118 loads. August live cattle sank 55 cents Wednesday to $132.175, the contract’s lowest closing price since May 31.
USDA reported net U.S. beef sales of 17,000 MT for 2022, up 52% from the previous week and up 6% from the prior four-week average.
HOGS: Lean hogs may face carryover pressure from Wednesday’s drop to two-week lows and signs of a peak in the cash market. The next CME lean hog index quote is expected to fall 40 cents to $111.24, down from a 10-month high. USDA’s Hogs & Pigs (H&P) Report Wednesday showed the June 1 inventory down 0.9%, with the marketing herd also down 0.9% and the breeding herd 0.8% smaller than year-ago. The numbers figures were virtually in line with traders’ expectations and should have no significant market impact this morning. Pork cutout values rose $3.09 to $108.56 on relatively light movement of about 247 loads. August lean hogs fell 25 cents Wednesday to $103.575, the contract’s lowest closing price since June 14.
USDA reported net weekly pork sales of 32,300 MT for 2022, up 27% from the previous week and from the prior four-week average.