GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: SRW 5 to 7 cents lower; HRW 1 to 3 cents lower; HRS steady to 2 cents lower.
GENERAL COMMENTS: Corn and soybeans saw modest corrective buying overnight, while wheat saw continued selling pressure. The key for corn and soy will be strength on this morning’s open, as selling on the open has been the norm this week. Outside markets are mixed this morning as the U.S. dollar index gave up a significant portion of yesterday’s gains and front-month crude oil futures are seeing resurgent selling pressure after trading at the highest mark in four weeks on Tuesday.
Little to no ethanol will qualify for U.S. sustainable aviation fuel (SAF) credits under a new pilot program by President Joe Biden’s administration, which toughened climate requirements, according to Reuters. A Reuters review of data from USDA suggests almost no U.S. corn farmers use no-till, plant cover crops and use high efficiency fertilizer at the same time, as required by the new guidelines. Nationally, continuous no-till is used on about 33% of cropland acres, efficient fertilizer application on about 26% and cover crops on about 6%, according to a 2022 USDA report. There was no breakdown by crop or for corn destined for ethanol production facilities. Officials at five ag and biofuel trade groups told Reuters few, if any, ethanol makers will be able to meet the standard. The pilot program covers ethanol produced in 2023 and 2024 and will be replaced by a new program in 2025 that biofuel groups hope will be less restrictive.
The European Union agreed to hike tariffs on imports of Russian grain to curb the Kremlin’s revenues and prevent those shipments from destabilizing the region’s farm sector. The tariffs, which also apply to Belarusian grain, will be in place from July 1, EU trade chief Valdis Dombrovskis said.
China is sending record quantities of soymeal abroad, as a shrinking number of pigs and weak demand for pork force processors to export their surplus animal feed. Bloomberg says cash-strapped Chinese consumers aren’t spending like they used to, and farmers have reduced their hog herds because prices are too low, limiting demand for feed. That’s dropped domestic soymeal prices to near three-year lows. China’s soymeal exports climbed to almost 600,000 MT in the first four months of 2024, which is nearly five times the level of the previous year.
Wednesday was largely dry throughout the Corn Belt and planting likely occurred in many areas, says World Weather Inc. Frequent rain is expected throughout the Midwest through Wednesday of next week, slowing planting in much of the region, though keeping soil conditions favorable, says the forecaster.
Due to Monday’s holiday, export sales data for the week ended May 23 will be released Friday morning.
CORN: July corn futures saw modest corrective gains overnight. Initial resistance stems from the 20-day moving average at $4.59 and is backed by resistance at $4.64 3/4. A resurgence of selling pressure finds support at $4.54, which is backed by the psychological $4.50 mark.
SOYBEANS: July soybean futures saw corrective gains overnight. Bulls are seeking to overcome initial resistance at the 20-day moving average at $12.21 1/4, which is backed by resistance at $12.27. Support at the 40-day moving average, currently at $12.12 1/4, capped losses overnight. Further selling targets support at $12.03 1/2.
WHEAT: July SRW futures saw continued selling pressure overnight. Bulls are seeking to overcome initial resistance at $6.95 before tackling the psychological $7.00 mark, which has acted as stiff resistance the last week and a half. Initial support stems from uptrend line support at $6.86, a break below which likely increases selling pressure, targeting the 20-day moving average at $6.67 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeders are expected to open with a mostly firmer tone as futures continue to consolidate on the daily bar chart. While prices sustained heavy selling pressure Wednesday due to China blocking imports from certain U.S. processing plants, futures closed well off session lows and remain in the tight consolidation pattern that has capped both gains and losses in the last week. Still, traders anticipate a pullback from last week’s record cash cattle average, as the pattern has been a brief period (three to five weeks) of price pressure after the cash market posted previous record highs. Wholesale beef prices finished Wednesday mixed, as Choice cutout firmed another $1.50 to $313.62, a fresh for-the-move high, while Select dipped 95 cents to $302.48.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on corrective buying, though persistent contra seasonal weakness in the cash market could limit gains after the open. The CME lean hog index is down another 47 cents to $90.79 as of May 28, marking the seventh consecutive daily decline. Daily losses have accelerated over that period, accumulating to $1.50. Pork cutout continues to struggle maintaining strength above $102.00, as prices slipped $1.66 to $101.74 yesterday, led by losses in bellies, loins and ribs. Meanwhile, movement remained strong at 309.40 loads, indicating strong retailer demand on the pullback, which could limit losses seen in the wholesale market.