GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: SRW 1 to 3 cents higher; HRW 4 to 6 cents lower; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Corn and soy faced follow-through selling pressure overnight, while the winter wheat market was mixed, with SRW seeing buying interest tick up into the break. Outside markets are unfavorable this morning, as front-month crude oil futures are trading new lows and the U.S. dollar index is trading near unchanged. Traders will be paying close attention to the FOMC results this afternoon, where interest rates are expected to be unchanged, though the following press conference with Fed Chair Powell will give key insights to the Fed’s timeline for interest rates for the remainder of the year. Concerns remain over rates, as lingering inflation pressures and a robust job market suggest that progress toward the 2% inflation target has stalled.
As we reported in “Evening Report” yesterday, Treasury and IRS issued updated guidance on the sustainable aviation fuel (SAF) tax credit, aligning with the Inflation Reduction Act’s goal to boost SAF production by providing incentives based on lifecycle greenhouse gas (GHG) reductions. This guidance includes the release of the now called 40BSAF-GREET 2024 model, designed to calculate GHG reductions more accurately, incorporating new data and methodologies including climate-smart agricultural practices for soybeans and corn as a feedstock for SAF. EPA’s new model is designed to address previously identified shortcomings in the R&D GREET model, particularly in how it calculated lifecycle greenhouse gas emissions. The lifecycle approach accounts for all emissions from the initial production stages through to the final use of the fuel. Click here to view our special report on the SAF credit guidance, including biofuels industry comments.
Argentina’s oilseed sector workers lifted their two-day strike late Tuesday, despite the lower house of Congress approving contentious reforms backed by President Javier Milei but opposed by some unions. Activity at the main agricultural shipping hub in Rosario began normalizing late Tuesday. “We’re lifting the [strike] action now,” Daniel Succi, secretary general of the SOEA oilseed worker union, told Reuters. Next week a union meeting will be held “to see how we proceed,” he added.
Analysts expect USDA to report March soybean crush totaled an all-time record 205.6 million bu., according to a Bloomberg survey. That would be up 11.7 million bu. (6.0%) from February and 7.6 million bu. (3.8%) above last year. Corn-for-ethanol use is expected to total 464.5 million bu., which would be up 23 million bu. (5.2%) from February and 28.4 million bu. (6.5%) above March 2023.
Rain fell on much of the western Corn Belt, parts of northwetern to central Illinois and portions of south-central and southeastern Ohio, while most of the eastern Corn Belt saw improving conditions for planting, says World Weather Inc. Regular rounds of showers and thunderstorms are expected through May 10, slowing fieldwork across the Midwest, though ensuring soil is moist across the region.
CORN: July corn futures are trading lower for the fourth consecutive session. Initial support stands at the overnight low of $4.44, which is backed by $4.41 then $4.36 1/4. Initial resistance stems from the converged 10-day, 20-day and 40-day moving averages from $4.47 to $4.48, which finds backing from $4.52 1/2.
SOYBEANS: July soybean futures saw modest follow-through selling overnight. Initial resistance stands at $11.66 3/4 and is backed by the 10-day moving average at $11.72 1/4. Further selling finds support at $11.53 1/4 then $11.49.
WHEAT: July SRW futures traded on both sides of unchanged overnight. Initial resistance stands at $6.08 1/2, with little backing until the for-the-move high close at $6.22 1/4. Bulls are seeking to hold support at $5.99 1/2, the 10-day moving average, yesterday’s low of $5.95 1/2, then $5.89 1/4 on continued selling pressure.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to start with a mostly weaker tone in a continuation of early week weakness, as fear surrounding H5N1 continues to weigh heavily on the market. News earlier this week that USDA would begin testing ground beef samples for H5N1 sent live cattle futures sharply lower, which led to technical selling and is quickly negating the recent uptrend. The cash cattle market looks to offer little support, as cash sources now expect steady/weaker cash prices this week. Wholesale beef prices have lost some of their footing as well, as Choice beef fell $3.16 to $294.37 and Select dropped 26 cents to $289.95, narrowing the Choice/Select spread to $4.42, while movement was a modest 110 loads.
HOGS: Lean hog futures are expected to open with a mostly weaker tone. June futures’ failure to sustain Tuesday’s rally and close near session lows will likely breed additional selling this morning. Futures maintain a modest uptrend on the daily bar chart though they are near uptrend support, which could limit selling pressure after the open. The CME lean hog index is down a dime to $90.26 as of April 29, marking the fourth consecutive daily decline, though the smallest drop of the recent downturn. Wholesale pork prices slipped 24 cents to $98.76 on Tuesday, led lower by bellies and hams. Movement slipped to 248 loads after surging on Monday.