GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 6 to 8 cents higher.
Wheat: Winter wheat steady to 2 cents higher; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Soybeans posted modest corrective gains overnight while corn and wheat pivoted near unchanged. Sellers have commanded the opens thus far this week, a break from that trend will be key. Outside markets are mixed this morning, as both front-month crude oil futures and the U.S. dollar index are posting modest gains.
Soybean sales in Argentina nearly doubled in May from the previous month, the government said, due to drier conditions and improving international prices. Sales reached 5.33 MMT in May, up 90% from April, according to Argentina’s bioeconomy secretariat. Year-to-date, however, producers have sold 39% of this year’s estimates 49.7 MMT production – the slowest pace in nine years.
Ukraine’s overall waterborne ag exports totaled 5.9 MMT in May, including 5.1 MMT shipped through its Black Sea ports and 800,000 MT sent via the River Danube, according to Spike Brokers, which tracks and publishes export statistics. That would be down from maritime ag exports of 6.5 MMT in April, based on UGA traders union data. UGA noted in May Ukraine exports via seaports and land included 3.6 MMT of corn, 1.65 MMT of wheat, 624,000 MT of sunflower oil, 209,000 MT of barley and 107,000 MT of soybeans. Ukraine’s ag ministry said 2023-24 grain exports reached 47.4 MMT as of June 5, up from 45.6 MMT during the same period last year.
China’s export boom extends beyond high-tech industries targeted by the West, creating potential backlash from countries previously neutral in trade conflicts, Bloomberg reports. China’s manufacturing trade surplus is nearing record highs, reflecting a broader surge in exports. This includes green-energy goods, steel, animal feed and more, as domestic demand weakens due to a real estate slump slowing the economy. Of note: Chinese solar firms are halting production at Southeast Asian factories as increased U.S. trade barriers create uncertainty for exports from the region.
Rain and interruptions to fieldwork occurred from much of the western Corn Belt into central and northern Illinois Wednesday while Kentucky into nearby Indiana and southwestern and southcentral Ohio also received rain, says World Weather Inc. The next two weeks are expected to see more sunshine than rain and fieldwork should advance well over the period, says the forecaster.
CORN: July corn futures saw modest losses overnight. The last two sessions have seen an increase in volume and limited selling below $4.40, marking that area as significant support. A break below that mark eyes support at $4.35 3/4. Resistance comes in at $4.44 and is backed by the psychological $4.50 mark, which coincides with the 10-day moving average.
SOYBEANS: July soybean futures saw modest corrective gains overnight. Bulls are seeking to overcome initial resistance at yesterday’s high of $11.89 1/2 before tackling firmer resistance at the psychological $12.00 mark. Support comes in at $11.82 and is backed by the psychological $11.75 mark, then $11.66 3/4.
WHEAT: July SRW futures saw muted volatility on light volume overnight. Bulls are seeking to overcome resistance at $6.66 3/4 before tackling the 10-day moving average at $6.74. Support comes in at the overnight low of $6.55, which is backed by the psychological $6.50 mark.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone, supported by continued strength in wholesale beef prices. Choice and Select cutout both surged to fresh for-the-move highs yesterday, with Choice gaining $1.28 to $316.88 and Select rising 77 cents to $304.47. The recent strength in beef and the pullback from all-time highs in cash cattle has pushed some packer margins back into the black, which could limit expected pressure on the cash market this week. Cash cattle prices remain a wide premium to the futures market, which is likely to keep much of the downside intact and strengthening technicals point to higher futures trade in the near term.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on corrective buying, though persistent sellers could limit gains after the open. Prices are heavily oversold on the daily bar chart and Tuesday brought the highest volume ever for the life of the July contract. The CME lean hog index is up another 20 cents to $91.93 as of June 3. As of Tuesday’s close, the premium June lean hog futures held to today’s cash quote dwindled to 77 cents. If the cash market continues to firm, it will provide traders an opportunity to arbitrage futures with the cash market, which could limit near-term selling. Wholesale pork prices sunk 67 cents to $100.76 on Tuesday, driven by a $10.67 drop in bellies.