GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 6 to 8 cents lower.
Wheat: SRW 2 to 4 cents higher; HRW 5 to 7 cents higher; HRS 4 to 6 cents higher.
GENERAL COMMENTS: Wheat led strength overnight, soybeans led to the downside and corn was caught in the middle, though each faced increased selling pressure into the break. Outside markets are favorable this morning as front-month crude oil futures are seeing corrective buying from recent lows and the U.S. dollar index is trading around 200 points lower.
USDA reported daily sales of 215,000 MT of corn for delivery to Mexico, with 165,000 MT slated for delivery during the 2023-24 marketing year and the remaining 50,000 MT for delivery during 2024-25.
Heavy weekend rainfall was seen over the central Corn Belt and Tennessee River Basin. These areas are expected to receive more rainfall this week, limiting planting in the wettest areas. The Southern Plains are forecast to receive some needed rains, though they will come too late to benefit much of the HRW crop. In the Black Sea region, Russia’s Southern Region, western Kazakhstan and eastern Ukraine won’t receive any significant rain during the next 10 days to two weeks while temps will be warm, increasing crop stress in these areas.
Russia’s IKAR agricultural consultancy cut its forecast for the country’s wheat crop another 2 MMT to 81.5 MMT. Its forecast for 2024-25 Russian wheat exports was lowered to 44 MMT. IKAR expects all grain production at 129.5 MMT, with grain exports at 55.5 MMT. Some 1.5 million hectares of crops in Russia have been damaged by bitter frosts this spring and the total figure may rise to 2 million hectares, the head of the Russia’s Grain Union said on Monday. It said Russia’s total grain production will be lower than 130 MMT, without providing a specific estimate. Russia’s ag ministry does not plan to revise its forecasts for the Russian grain harvest or exports, RIA state news agency cited Minister Oksana Lut as saying on Monday.
Cold temperatures across much of Argentina’s major crop areas over the weekend will help slow a severe leafhopper outbreak that has damaged the country’s corn crop, the Rosario Grain Exchange said on Monday. The leafhopper outbreak has resulted in the exchange cutting its forecast for the current corn harvest by 20% since the beginning of the season to 47.5 MMT.
South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop estimates at 147 MMT for soybeans and 112 MMT for corn. He has a neutral bias toward both crops as he monitors soybean losses in Rio Grande do Sul due to recent flooding and weather conditions for the safrinha corn crop in central and south-central areas of the country. Cordonnier left his Argentine production estimates at 50 MMT for soybeans and 47 MMT for corn, though he has a lower bias toward both amid falling yields as harvest progresses.
CORN: July corn futures were caught between wheat strength and soy weakness overnight. Bulls are seeking to overcome initial resistance at $4.71, which is backed by the for-the-move high close of $4.72 1/2. Support stems from the 10-day moving average at $4.62 1/4 with additional support at $4.56 1/2.
SOYBEANS: July soybean futures saw relative weakness overnight. Bulls continue to struggle garnering much bullish momentum under $12.50 resistance, which is reinforced by last week’s high of $12.58 1/4. Initial support stands at $12.36 1/4 and is quickly reinforced by the 10-day moving average at $12.34 3/4, with additional reinforcement from $12.23 3/4.
WHEAT: July SRW futures opened higher overnight and scored a fresh for-the-move high. Initial resistance stems from the overnight high of $7.20 and is quickly backed by $7.25. Support stands at the psychological $7.00 mark and is backed by the 10-day moving average at $6.84.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, continuing to build on cash market strength. Friday’s USDA Cattle on Feed Report was neutral overall, with feedlot inventories, placements and marketings each virtually right in line with pre-report expectations, which should render little effect on futures trade today. It is worth noting that feedlot inventories saw the first year-over-year decline in eight months. Beef inventories declined less than average in the Cold Storage Report, as beef stocks fell 3.8 million lbs. to 430.7 million lbs. at the end of April, whereas the five-year average was a 21.6-million-lb. decline. Cash cattle trade is expected to be a record for last week, which should continue to support futures, though expectations of a pullback from record levels have kept futures well below the cash market.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as cash fundamentals continue to weigh on the market, though oversold technical conditions could limit losses after the open. The CME lean hog index is down another 14 cents to $91.63 as of May 23. June futures continue to maintain a premium to the index, though it has shrunk, as expectations of seasonal strength in the cash market diminish. Wholesale pork prices have struggled to garner momentum higher, as demand continues to lack as noted in last Friday’s USDA Cold Storage Report, which showed pork stocks building 38.2 million lbs. to 501.3 million lbs. in April, above the five-year average increase of 18.8 million lbs. during the month. Cutout was up 45 cents to $99.14 Friday, led higher by gains in butts and hams.