GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 9 to 11 cents lower.
Wheat: Winter wheat 11 to 13 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Wheat futures led weakness overnight, dragging corn and soybeans lower. Corn and beans remained within Thursday’s range overnight. Outside markets are mixed this morning as front-month crude oil futures are trading near unchanged and the U.S. dollar index is sharply higher on higher interest rates, as bond are facing heavy selling pressure, negating most of this week’s gain.
USDA reported daily export sales of 104,000 MT of soybeans for delivery to China during the 2023-24 marketing year.
The Bureau of Labor Statistics released jobs data for May. The U.S. economy added 272,000 jobs in May, higher than (another) downwardly revised 165,000 jobs in April and above expectations of 185,000 jobs. While the economy added more jobs than expected, the unemployment rate rose to 4.0%, above expectations of 3.9%. The continued hot labor market draws into question the Federal Reserve’s ability to cut interest rates in the near-term.
China imported 10.22 MMT of soybeans during May, up 19.3% from April but down 15.0% from last year’s record of 12.02 MMT. Through the first five months of this year, China imported 37.37 MMT of soybeans, down 5.4% from the same period last year.
State-run China Daily reports despite ambitions for enhanced food self-sufficiency, China is projected to continue relying heavily on U.S. imports of soybeans and sorghum for decades to come. The Chinese Academy of Agricultural Sciences (CAAS) forecasts that by 2050, China will still depend on the U.S. for approximately 39% of its soybeans and 60% of its sorghum. To meet the evolving demands of its population, CAAS projects China will need to significantly increase production of key food groups. By 2035, production is expected to rise by 29.64 MMT for meat, 6.13 MMT for eggs, 9.58 MMT for dairy products and 19 MMT for aquatic products. These figures are expected to climb further by 2050. This projected growth will increase animal feed demand.
Russia has started wheat shipments to Brazil from Vysotsky Port on the Baltic Sea, the quality inspection arm of Russia’s agricultural watchdog said. Shipments from the Baltic are intended to relieve pressure on grain terminals on the Azov and Black Seas, which are operating at maximum capacity amid record exports this season. The planned capacity of the grain terminal at Vysotsky Port is 4 MMT per year.
CORN: July corn futures saw resurgent selling pressure overnight. Initial resistance stands at $4.49 3/4 and is backed by the 20-day moving average, currently at $4.52 1/2, which capped gains Thursday. Support comes in at $4.46 3/4 then Wednesday’s for-the-move low close of $4.39 1/4.
SOYBEANS: July soybean futures negated a portion of Thursday’s gains overnight. Initial resistance stands at $11.99 1/2, the 10-day moving average, which coincides with the psychological $12.00 mark. Further buying would find resistance at $12.06. Bulls are seeking to hold support at $11.82, which is backed by firm support at $11.75.
WHEAT: July SRW futures saw continued selling pressure overnight. Initial resistance now stands at $6.34, which is reinforced by the 40-day moving average at $6.43 1/2. Prices are near-term oversold which could spark some corrective buying efforts. Further selling finds support at $6.22 1/4, then $6.05.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, in a continuation of buying efforts seen in the latter half of Thursday’s session. Cash cattle trade remains slow so far this week, with minimal trade taking place at lower prices as packers worked to buy cattle at lower prices and feedlots hold out for steady bids. Cash trade is likely to have little effect on futures given current steep discounts unless prices unexpectedly rise. Wholesale beef ended Thursday mixed as Choice cutout gains $1.42 to $316.21 while Select slipped 7 cents to $300.83.
HOGS: Lean hogs are expected to open with a modestly firmer tone on corrective buying, as futures continue to be heavily oversold on the daily bar chart. Summer futures posted modest gains on Thursday despite relative weakness in the cash market, as the CME lean hog index is down 14 cents to $91.91 as of June 5. Pork cutout rose 38 cents to $100.69, led by gains in bellies, while movement totaled a firm 315.05 loads. The upside has largely been capped in both the index and pork cutout, which have been stuck in the low-$90.00 and low-$100.00 range, respectively.