GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 5 to 7 cents lower.
Wheat: SRW 5 to 7 cents lower; HRW 10 to 12 cents lower; HRS 4 to 6 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside overnight in a continuation of Tuesday’s weakness. Prices are nearing the lower end of the recent sideways trading range in each crop. Outside markets are quiet this morning, as front-month crude oil futures continue to see modest corrective gains and the U.S. dollar index is trading around 135 points higher, just continuing the uptrend from the December low.
USDA rated the winter wheat crop 48% “good” to “excellent,” down one percentage point from the previous week. The amount of crop rated “poor” to “very poor” increased one point to 19%. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 0.3 point, despite 0.8-point declines in Kansas and Colorado. The SRW crop dropped 8.0 points, led by a 3.3-point drop in top producer Illinois. Click here for details.
India is poised to begin wheat imports after a six-year gap, sources told Reuters, as the approaching end of general elections removes a key hurdle. New Delhi is expected to abandon a 40% tax on wheat imports this year, officials and other sources told Reuters, paving the way for private traders and flour millers to buy foreign wheat. A government source also said, “The removal of the import duty will help us ensure that our own reserves don’t fall below a psychological benchmark of 10 million tons.”
Ukraine’s ag ministry says its grain exports will reach 5 MMT this month, up from around 3 MMT in May 2023. Through 11 months, Ukraine’s 2023-24 grain exports stand at 46.4 MMT, up 1.5 MMT (3.3%) from the same period last year, including 26.2 MMT of corn, 17.2 MMT of wheat and 2.4 MMT of barley.
The International Monetary Fund (IMF) raised both its 2024 and 2025 GDP forecasts for China by 0.4 percentage points to 5.0% and 4.5%, respectively, after a “strong” first quarter and new measures by Beijing to shore up the economy. However, deflationary pressures continue to loom over China’s economy and a protracted property crisis remains a major drag on growth. Longer term, IMF warned that growth in China would slow to 3.3% by 2029 due to an aging population and slower expansion in productivity.
Rain was common from north-central Iowa and eastern Minnesota to the southern and western halves of Ohio and southwestern to eastern Michigan Tuesday while most other areas were dry and saw improving to favorable conditions for planting, says World Weather Inc. The Midwest will see regular rain from Thursday to next Wednesday, slowing planting and replanting efforts in much of the region, though keeping soil conditions favorable ahead of a dry window from June 6 to 12.
CORN: July corn futures saw continued selling pressure overnight. Initial resistance stands at $4.61 1/4 and is backed by $4.67. Bulls need a close above the latter mark to negate a bearish head and shoulders pattern on the daily bar chart. Support stems from the 20-day moving average at $4.59 1/2, which capped losses overnight, then $4.56 3/4.
SOYBEANS: July soybean futures saw sharp selling pressure early this morning. Bulls are seeking to reclaim prior support now initial resistance at $12.31, the 10-day moving average, which is reinforced by strong resistance at $12.50. Initial support stands at $12.22 1/2, the 20-day moving average, which capped most of the selling pressure overnight. Additional support lies at $12.12 1/2.
WHEAT: July SRW futures continue to struggle garnering much momentum above $7.00, marking that as initial resistance. Additional buying targets resistance at $7.16 3/4 then yesterday’s high of $7.20. Additional corrective selling finds support at $6.88 1/2, then the 10-day moving average at $6.85 1/2.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeders are expected to open higher as both cash fundamentals and technicals remain supportive for futures. Cash cattle averaged a record $190.09 last week, eclipsing the previous high posted in March. Futures have been grinding consistently higher since mid-May, supported in tandem by both rising cash cattle prices and strengthening wholesale beef values. Choice cutout was up $1.67 to $312.12 Tuesday though remains below the May 17 peak of $313.45. Select was up $1.71 to $303.43, a fresh for-the-move high. The nearby June contract remains well below cash prices, which should be price-supportive but also indicates traders anticipation of a short-term pullback.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on corrective buying. Tuesday marked the seventh consecutive daily decline in July lean hog futures and prices are heavily oversold on the daily bar chart. Futures closed off the lows and volume was significantly more than the 10 prior trading days, indicating corrective buying and bargain hunting that could persist today. The CME lean hog index is down another 37 cents to $91.26 as of May 24, the sixth straight daily decline. Pork cutout firmed $4.26 Tuesday to $103.40, just below the April 15 peak in wholesale prices. All cuts except butts saw gains, with a $9.37 jump in primal bellies leading the way higher.