GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 12 to 14 cents higher.
Wheat: SRW 5 to 7 cents higher; HRW 11 to 13 cents higher; HRS 9 to 11 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each posted corrective gains overnight on light volume. Key will be if buyers can maintain gains after the open, which has brought selling pressure all week. Outside markets are favorable this morning as front-month crude oil futures are showing modest strength and the U.S. dollar index is trading around 300 points lower.
The Midwest saw another day of dry and favorable conditions on Thursday, contrary to early forecasts and allowing producers to continue to plant at a healthy pace. Some rain fell in the west and fell on most areas from easter Kansas to western Iowa and eastern Nebraska to the eastern Dakotas and western into central Minnesota, says World Weather Inc. The forecaster calls for regular rain through Wednesday, which likely slows planting efforts.
Russian Deputy Prime Minister Dmitry Patrushev said frosts earlier this month destroyed crops on around 1 million hectares, including 850,000 hectares of grains. Despite the damage, he maintained Russia’s 2024 grain production forecast of 132 MMT, including 85 MMT of wheat, though he said 2024-25 grain exports will likely fall to 60 MMT from 70 MMT in the current marketing year.
Patrushev said Russia will extend its export ban on rice, without providing specific details, but has no plans to lengthen the curb on durum shipments. He said Russia will increase baseline prices for export duties by 1,000 rubles ($11.07) for all types of grains.
Growth in farm real estate values slowed significantly, with nonirrigated farmland values increasing by an average of 8% above a year-ago in the first quarter of 2024, nearly half the growth rate of the previous year, according to Federal Reserve Surveys of Agricultural Credit Conditions. This slowdown reflects declining agricultural commodity prices and softer sector conditions. Farmers’ demand for agricultural loans rose, while repayment rates declined, driven by deteriorating farm income. Renewal and extension activity on farm loans also saw a modest increase. Despite tightening financial conditions, farm household spending stayed strong and balance sheets appear capable of handling thinner profit margins in 2024. The robust spending, coupled with declining farm income, may further increase the sector’s credit needs if current trends persist.
Export sales for the week ended May 23:
Corn: Net sales of 810,100 MT for 2023-24, down 11% from the previous week and 2% from the four-week average. Increases came primarily from Mexico and Spain. Traders expected 600,000 MT to 1.0 MMT for 2023-24. Exports of 1,044 MMT were down 28% from the previous week and 17% from the four-week average.
Soybeans: Net sales of 329,400 MT for 2023-24, up 18% from the previous week but down 5% from the four-week average. Traders expected sales from 200,000 to 400,000 MT for 2023-24. Exports of 208,400 MT—another marketing year low, were down 20% from last week and 35% from the four-week average.
Wheat: Net sales reductions of 60,900 MT for 2023-24 and net sales of 381,700 MT for 2024-25. Traders expected (100,000) to 100,000 MT for 2023-24 and 200,000 to 400,000 MT for 2024-25. Exports of 354,000 MT were up 80% from the previous week but down 5% from the four-week average.
CORN: July corn futures saw an increase in buying activity overnight from the neckline of a potential bearish head and shoulders pattern. A break below support at $4.48 1/2 would likely see an increase in selling, targeting support at $4.43 3/4. Bulls are seeking to overcome resistance at $4.56, the 40-day moving average, while further buying eyes downward trendline resistance at $4.65 1/2.
SOYBEANS: July soybean futures saw strong corrective buying overnight. Bulls overcame resistance at $12.20 3/4, the 20-day moving average, overnight, marking that as initial support. Further buying eyes the prior support, now resistance zone near $12.35. Support stems from $12.20 3/4 with further selling pressure seeking to close prices below $12.12 1/2.
WHEAT: July SRW futures saw corrective gains on light volume overnight. Prices are threatening to break the uptrend dating back to mid-April, bulls are seeking to maintain prices above yesterday’s low of $6.73 1/4. Further support stems from the 20-day moving average at $6.68 1/2. Resistance stems from $6.93, which is reinforced by the psychological $7.00 mark, which has capped most gains in the past two weeks.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeders are expected to open with a mostly firmer tone as futures are trading at steep discounts to the cash market. While cash cattle activity has been light so far this week and not enough for a true price test, trade has averaged near last week’s record, drawing some expectations for a sharp decline into question. That could spark some corrective buying in futures. Meanwhile, as packers are seeking to get cattle bought at lower prices, lower cash trade could quickly vindicate traders and continue to incite selling pressure. USDA reported net beef sales of 15,700 MT for 2024, down 27% from the previous week and 12% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, building on yesterday’s modest strength. While prices closed modestly higher Thursday, prices closed well off intraday highs as sellers emerged late in the session. Oversold conditions are likely to continue to support prices modestly, but key will be if futures can break the steep downtrend that has capped gains over the past month. The CME lean hog index is up 21 cents to $91.00, ending a seven-day slide that took $1.50 off the market. Pork cutout firmed 21cents to $101.95 Thursday, driven by sharp gains in bellies. USDA reported net pork sales of 44,000 MT for 2024, up 69% from the previous week and the four-week average.