GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 1 to 3 cents higher.
Wheat: SRW 10 to 12 cents higher; HRW 10 to 12 cents higher; HRS 11 to 13 cents higher.
GENERAL COMMENTS: Wheat futures led resurgent strength across the grain and soy markets overnight. Outside markets are mixed this morning, as front-month crude oil futures continue to consolidate near recent lows and the U.S. dollar index is trading around 200 points higher.
Some 25 trade associations from diverse sectors of the economy — including aviation, agriculture, rail, manufacturing and biofuels — sent a letter to the Treasury Department on its highly anticipated guidance for the new clean fuel production credit, which applies to both sustainable aviation fuel and vehicle fuels. The letter warns, “Any extended delays in publication of guidance for the Sec. 45Z credit may disrupt project timelines, impede capital flows and threaten existing production and demand for low carbon renewable fuels.” Signers of the letter included the Advanced Biofuels Business Council, Airlines for America, American Soybean Association, Growth Energy, National Corn Growers Association, National Oilseed Processors Association and the Renewable Fuel Association, among others.
Senate Ag Committee Chair Debbie Stabenow (D-Mich.) and Rep. David Scott (D-Ga.) issued a joint statement regarding the farm bill after meeting with House Ag Committee Democrats and Rep. Hakeem Jeffries (D-N.Y.), the Democratic leader in the House. They emphasized the commitment of House and Senate Democrats to passing a strong, bipartisan farm bill that supports farm and family safety nets and invests in rural communities. Stabenow and Scott criticized House Republicans for proposing policies they believe undermine the bipartisan coalition necessary for a successful farm bill. They stressed the need for a bill that unites this coalition and maintains the tradition of providing food assistance to vulnerable Americans while supporting farmers facing the climate crisis. They expressed readiness to work with Republicans on a bipartisan bill that supports farmers, feeds families and strengthens rural communities. The joint statement appears to address policies in the House GOP farm bill proposal that would halt the use of the Thrifty Food Plan, a USDA analysis used to increase benefits under SNAP/food stamps.
On Day 2 of the Wheat Quality Council’s HRW wheat tour, scouts found an average yield of 42.4 bu. per acre on samples taken from western and south-central Kansas. That was up sharply from an average yield of 27.6 bu. per acre in the same areas last year and the five-year average (2018-23; no tour in 2020) average of 40.8 bu. per acre. While conditions are much better than last year’s drought, scouts found varied wheat crops across areas sampled. Scouts will sample fields in southeastern and eastern Kansas today on routes from Wichita to Manhattan. A final tour yield estimate along with a scout guesstimate of Kansas crop size will be released this afternoon.
Export sales for the week ended May 9:
Corn: Net sales of 742,200 MT for 2023-24, down 17% from the previous week and 14% from the four-week average. Traders expected 700,000 MT to 1.05 MMT for 2023-24. Exports of 952,400 MT fell 23% from the previous week and 35% from the four-week average.
Soybeans: Net sales of 265,700 MT for 2023-24, down 38% from the previous week and 31% from the four-week average. Increases came primarily for Egypt, Indonesia and Mexico. Traders expected 300,000 to 550,000 MT for 2023-24. Exports of 443,500 MT, up 46% from last week and 21% from the four-week average.
Wheat: Net sales of 78,500 MT for 2023-24 and net sales of 304,300 MT for 2024-25. Traders expected (100,000) to 100,000 MT for 2023-24 and 300,000 to 600,000 MT for 2024-25. Exports of 449,100 MT were up 33% from the previous week but down 6% from the four-week average.
CORN: July corn futures posted modest gains overnight. Resistance stands at $4.69 and is reinforced by this week’s high of $4.75 1/2. Bulls are seeking to maintain an uptrend from the April low by keeping prices above $4.62 support today. Selling pressure finds stiff support at $4.55.
SOYBEANS: July soybean futures’ range continues to tighten on the daily bar chart. Resistance persists at the 100-day moving average at $12.22. Further buying eyes resistance at $12.32 1/4. Support comes in at $12.05 1/2, the psychological $12.00 mark, then $11.91 3/4.
WHEAT: July SRW futures negated Wednesday’s losses overnight. Bulls are seeking to overcome initial resistance at $6.87 before tackling Wednesday’s high of $6.97. Support comes in at $6.62 1/4 then the 10-day moving average at $6.55 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on wholesale beef strength. Choice cutout firmed another $2.38 to $306.77 Wednesday, while Select rose 49 cents to $294.31. The surge in wholesale values may encourage packers to raise cash cattle bids for the fourth consecutive week, though cash trade is off to a slow start. The rapid increase in cutout values this week has quickly improved packer margins, but futures have struggled to follow through to the upside, maintaining a pessimistic summer outlook. USDA reported net beef sales of 15,100 MT for 2024, up 23% from the previous week but down 11% from the four-week average.
HOGS: Lean hog futures are expected to open higher on resurgent strength in the CME lean hog index and on buying from technical support. June futures closed on support that has capped most of the downside in the last two weeks and continue to consolidate in a tight range, as prices have traded the $98.50 mark for eight consecutive sessions. Meanwhile, the CME lean hog index is up 47 cents to $91.76 as of May 14, marking a fresh for-the-move high in the seasonal uptrend and a sign that the index may be ready to continue its climb to a seasonal high in summer. Wholesale pork prices were up 19 cents to $101.70 on Wednesday, led by gains in butts and bellies. USDA reported net pork sales of 21,100 MT for 2024—a marketing-year low, down 14% from a week ago and 22% from the four-week average.