GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 4 to 6 cents lower.
Wheat: SRW 4 to 6 cents higher; HRW 5 to 7 cents higher; HRS 6 to 8 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each opened lower overnight, with corn and soybeans struggling to garner much bullish momentum overnight, while wheat reversed losses and traded higher into the break. Outside markets are supportive this morning, as front-month crude oil futures are seeing corrective gains and the U.S. dollar index is trading around 200 points lower.
Multiple rain events are forecast to push across the U.S. during the next 10 days, keeping planting to a minimum in the wettest areas. The lower Midwest, Delta and Southeast will be the wettest. HRW wheat areas received rains during the weekend, though not enough to end the dryness in west-central and southwestern locations. Areas of east-central Argentina experienced freezing temps overnight, with the cold blast expected to last into Tuesday. Rains fell on some of the safrinha corn areas in Brazil during the weekend and will last into early this week.
World Weather Inc. speculates permanent wheat damage from recent freezes is not likely to be more than 6%; winter rapeseed likely suffered damage on 40% of crop area. However, a much larger part of Russia’s Southern Region, eastern Ukraine and western Kazakhstan is dealing with drought. Lost wheat production because of drought could be many times greater than that which is lost from recent freezes.
Russia’s IKAR agricultural consultancy cut its forecast for Russia’s wheat crop to 86 MMT from 91 MMT previously. Its 2024-25 wheat export forecast was lowered 3.5 MMT to 47 MMT. IKAR forecasts total grain production at 135 MMT and exports at 59.5 MMT, down 5 MMT, respectively. Russia’s ag ministry kept its grain production forecast at 132 MMT.
Focus on the new farm bill will continue this week in Washington with additional briefings about the House farm bill proposals. The Ag Committee on Friday released a more extensive summary of key titles of the farm bill. House Ag Chair Glenn “GT” Thompson (R-Pa) is keeping the door open for some changes to the proposed House farm bill to woo some Dems to vote for the measure when the panel marks it up May 23. We continue to await the release of Congressional Budget Office scoring of the House and Senate farm bill proposals. Those will provide additional insight into analyzing which bills are truly reflective of production agriculture. On the economic front, U.S. inflation data will be in focus, with producer prices out on Tuesday and the consumer price index on Wednesday.
CORN: July corn futures opened lower on the overnight open though have since found buyers. Prices continue to hover below the May 7 high of $4.72, which will continue to act as resistance. Further buying finds resistance at $4.75, then $4.84 1/4. Support comes in at $4.65 1/2 then $4.61 3/4, the 100-day moving average.
SOYBEANS: July soybean futures gave back a portion of Friday’s gains overnight. Resistance at $12.22 1/4, the 100-day moving average, capped gains Friday and overnight. Further resistance stands at $12.25 3/4 then $12.40. Initial support stems from the 10-day moving average at $12.11 3/4, which is reinforced by $12.04 1/2.
WHEAT: July SRW futures saw followthrough buying overnight. Initial resistance stands at the overnight high at $6.72, with backing from $6.85. Support stems from the May 7 high of $6.53 3/4 and is backed by the 10-day moving average at $6.37 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Mixed.
CATTLE: Live cattle futures and feeders are expected to start the week with a mostly weaker tone, as sinking cash fundamentals continue to weigh heavily on the market. Through Thursday of last week, cash cattle averaged $185.25, down modestly from the prior week, dragged lower by concurrent losses in futures. As wholesale beef prices struggle to find a short-term bottom, packers are likely to remain selective in buying cattle, especially after large purchases in late April and early May. Choice cutout fell 82 cents to $294.57 Friday while Select sunk $1.59 to $10.40.
HOGS: Lean hog futures are expected to continue in a choppy sideways trend. Lean hogs lacked conviction either way last week, trading back and forth and going no where all week. That choppy trend is likely to continue as cash fundamentals lack direction as well. The CME lean hog index is up 4 cents to $91.32 as of May 9. While that is still 32 cents below the April high, there has only been one daily decline this month. Pork cutout firmed $1.34 to $99.77 Friday, led by a $7.13 jump in butts. That marks the highest cutout quote since April 23.