GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 1 to 3 cents higher.
Wheat: 13 to 16 cents higher.
GENERAL COMMENTS: Strong wheat gains led corn modestly higher overnight, while soybeans pivoted near unchanged. Price action will largely be dictated by the release of USDA reports at 11 a.m. CT. Outside markets are mixed this morning, as front-month crude oil futures continue to see modest corrective buying and the U.S. dollar index is trading around 85 points higher.
USDA will update its old-crop usage forecasts in the Supply & Demand Report at 11:00 a.m. CT. But the main feature will be the first official 2024-25 balance sheets. USDA is expected to project new-crop ending stocks will rise sharply from the current marketing year for corn, soybeans, wheat and cotton. USDA will also issue its first winter wheat production estimates. Click here to view the pre-report expectations.
China’s ag ministry forecasts the country will import far less corn, soybeans and cotton in 2024-25 than the current marketing year. For 2024-25, China expects to import 13 MMT of corn (down 6.5 MMT from 2023-24), 94.6 MMT of soybeans (down 1.5 MMT) and 2 MMT of cotton (down 800,000 MT). The ag ministry cited an expected increase in domestic corn production, and reduced feed demand from the hog industry for the declines in corn and soybean imports.
The Biden administration added 37 Chinese entities to a trade restriction list, including some for allegedly supporting the spy balloon that flew over the U.S. last year. The Chinese embassy in Washington called the move “blatant economic coercion and bullying in the field of technology,” and said China would resolutely safeguard the lawful rights of Chinese firms and institutions. President Joe Biden is also set to announce new China tariffs as soon as next week targeting strategic sectors including electric vehicles, batteries and solar equipment. Sen. Chuck Grassley, (R-Iowa) expects Beijing to respond. “We know how China reacted when Trump put tariffs on,” he said. “They hit agriculture with it. I can’t be sure that China would hit agriculture the same as they did in the Trump ones, but they’re going to hit back.”
France’s ag ministry rated the country’s wheat crop as 64% good or excellent as of May 6, up one percentage point from the previous week. However, that was still the lowest rating for this time of year since 2020.
Rain fell from the eastern half of Iowa to southern Wisconsin and northern Illinois to Ohio and into southern Michigan Thursday while most other areas were dry, with some planting occurring in drier areas, World Weather Inc noted. Today’s forecast is wetter than previously advertised as well and planting should be sluggish next week as well from the southwestern to the easter Corn Belt. A close watch will be made on Sunday evening into next Friday as heavier than expected precip could extend planting delays until the last week of the month, the forecaster said.
CORN: July corn futures followed wheat higher overnight. Bulls are seeking to overcome resistance at the 100-day moving average, currently at $4.61 1/2. Further buying finds resistance at $4.69 then Tuesday’s for-the-move high at $4.72. Meanwhile, support stands at $4.54 1/4, the 20-day moving average, which is reinforced by $4.52, then $4.46 3/4.
SOYBEANS: July soybean futures traded tight to the 10-day moving average overnight, which will remain a pivot at $12.09 1/2. Bulls are seeking to overcome initial resistance at $12.15 before tackling stiff resistance at $12.25. Further buying targets Monday’s for-the-move high close at $12.48 3/4. Support stands at the psychological $12.00 mark, which is quickly reinforced by the 40-day moving average at $11.97, then $11.85.
WHEAT: July SRW futures showed impressive strength overnight. Bulls are seeking to maintain overnight gains and close prices above $6.48 3/4. Further buying finds resistance at the overnight high of $6.60, with further backing from $6.66. Post-report selling finds support at $6.34, the ten-day moving average at $6.28 1/4, then $6.22 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to continue trading in a choppy downtrend, as sellers lack conviction due to discounts to the cash market and buyers remain hesitant. Cash cattle trade remains slow, as the only trading through Thursday morning was a small lot trading hands in Iowa on Monday at modestly weaker prices. Packers appear to have ended their recent accumulation of cattle, which could lead to a lull in trading in the next couple of weeks. Wholesale beef prices ended Thursday lower, as Choice cutout continues to slip from the quote over $300.00 Tuesday morning. Choice cutout fell $1.28 to $295.39 while Select dropped $2.49 to $285.76.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, supported by technical buying. June futures are resting on support that has capped most losses this week. The CME lean hog index is unchanged at $91.28 as of May 8. May futures are now just 69.5 cents above the index while June futures’ premium has sunk to $6.445. Modest premiums leave room for corrective buying when seasonal strength returns to the index. Wholesale pork prices dropped 86 cents to $98.43 as all cuts except ribs posted losses. Movement slipped to a modest 210.07 loads, which is concerning for underlying demand, especially considering Memorial Day is right around the corner.