Ahead of the Open | May 24, 2024

Corn, soybeans and wheat each saw limited volatility overnight, trading in relatively narrow ranges on both sides of unchanged.

Pro Farmer's Ahead of the Open
Pro Farmer’s Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: Steady to 2 cents higher.

Soybeans: 2 to 4 cents higher.

Wheat: SRW 1 to 3 cents lower; HRW 4 to 6 cents higher; HRS 3 to 5 cents higher.

GENERAL COMMENTS: Corn, soybeans and wheat each saw limited volatility overnight, trading in relatively narrow ranges on both sides of unchanged. Outside markets are mixed this morning, as front-month crude oil futures are trading narrowly near unchanged and the U.S. dollar index is trading around 325 points lower despite stronger interest rates this morning.

Grain and livestock markets will trade normal hours today. All markets and government offices are closed Monday, May 27, for Memorial Day. There will be no Pro Farmer reports or market commentary on Monday. Grain markets will reopen with the overnight session at 7:00 p.m. CT on Monday, May 27. Livestock markets will resume trading at 8:30 a.m. CT on Tuesday, May 28. Pro Farmer salutes all who gave their lives serving our great country. Happy Memorial Day.

A contentious House Ag Committee markup of a new $1.51 trillion farm bill began on Thursday and ended early Friday with four Democrats joining all 29 panel Republicans in voting for the measure, bringing the final tally to 33-21. Ag Committee Republicans blocked attempts by Democrats to amend the bill. Focus now turns to the House floor strategy for bringing the measure to a full chamber vote. Click here to see our full special report on the matter.

The Bloomberg Agriculture Spot Index, which gauges prices of nine major crops, turned higher on the year and is headed for the largest weekly gain since July. Bloomberg notes, “Droughts to frosts and heavy rain are popping up across key growers, risking tighter supplies and lifting the cost of agricultural staples.” While the measure remains far from its 2022 peak, the gains could eventually spell higher consumer prices. USDA will update its food price outlook this morning.

Group of Seven (G7) trade ministers are debating China’s industrial overcapacity, which U.S. Treasury Secretary Janet Yellen says is pumping cheap exports onto the global market. Other G7 members joining the call for China to rein in overcapacity, with France’s finance minister said there needs to be a clear assessment of overcapacity in China and of the “most efficient tools” to address the issue. He said the International Monetary Fund could be involved in the analysis.

Planting should have progressed well on Thursday with much of the Midwest seeing another day of dry weather. Regular rounds of rain are expected into Sunday, keeping planting to a minimum in many areas, with the northwestern Corn Belt seeing the least rain where some fieldwork should advance, says World Weather Inc.

CORN: July corn futures saw muted volatility overnight. Bulls are seeking to overcome resistance at yesterday’s high of $4.67 1/4, which is reinforced by resistance at $4.72 1/2. Support comes in at $4.61 1/2 then the 40-day moving average at $4.56 1/4.

SOYBEANS: July soybean futures continue to consolidate under $12.50 resistance. Strength above that mark could prove explosive, finding additional resistance at yesterday’s high of $12.58 1/4. Bulls are seeking to maintain support at $12.36 1/4, the 10-day moving average at $12.32 1/4, then $12.19 1/2.

WHEAT: July SRW futures continue to stall under $7.00 resistance. Strength above that mark targets resistance at Wednesday’s high of $6.93. Further profit-taking finds support at $6.82 1/2, the 10-day moving average at $6.78 3/4, then uptrend line support at $6.72.

LIVESTOCK CALLS

CATTLE: Choppy/higher.

HOGS: Choppy/lower.

CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone on continued strength in cash cattle. Cash cattle activity picked up on Thursday, with feedlots in the Southern Plains moving supplies at $1.00 higher prices, while feedlots passed on $1.00 higher prices in the northern market awaiting firmer bids. Analysts expect USDA’s Cattle on Feed Report this afternoon to show the large feedlot (1,000-plus head) inventory under year-ago levels for the first time in eight months. Based on a Reuters poll, USDA is expected to report the May 1 feedlot inventory down 0.8% from last year, while April placements are seen falling 6.1% and marketings rising 9.8%. USDA will also release the monthly Cold Storage Report. The five-year average is a 21.6-million-lb reduction in beef stocks during the month of April. Wholesale beef prices ended Thursday mixed, as Choice fell $2.33 to $309.84 and Select rose 47 cents to $300.08.

HOGS: Lean hogs are expected to open with a mostly weaker tone as futures continue to break down technically, though corrective buying could limit losses after the open. The CME lean hog index is down another nickel to $91.77 as of May 22, the fourth straight daily decline. USDA’s Cold Storage Report will feature pork stocks at the end of April, with the five-year average being an 18.8-million-lb rise. Pork stocks rose contra seasonally in March. Wholesale pork prices continue to slide, falling $1.38 on Thursday to $98.69, the third consecutive daily decline. All cuts except loins and butts posted losses on the day. Movement fell to just 237.35 loads, indicating retailer demand is waning and likely a source of recent wholesale weakness.