GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: SRW 2 to 4 cents lower; HRW 6 to 9 cents lower; HRS 7 to 9 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each saw selling pressure overnight, though corn and soybeans went into the break nearer session highs. Outside markets are supportive this morning as front-month crude oil futures are seeing modest corrective buying and the U.S. dollar index is trading around 130 points lower on weaker interest rates.
U.S. weather is projected to be wet enough to slow the planting pace across much of the Midwest, Delta and Plains, along with some areas of the Southeast this week, according to World Weather Inc. West-central and southwestern areas of the Plains will receive only erratic rainfall, leaving some locations quite dry. Rains are expected to continue across southern Brazil, though intensity should decline from torrential downpours over the past week. Safrinha corn areas in south-central Brazil are expected to remain hot and dry this week, though forecasts signal rains over Mato Grosso do Sul, Parana and Sao Paulo late next week. Frosts and freezes are likely in the western Commonwealth of Independent States this week, including some areas of Russia, though there is not much concern over production cuts.
New farm bill activity accelerated last week with the release of the most important sections of both House and Senate proposals. House Ag Chair Glenn “GT” Thompson (R-Pa.) and staff this week will issue several papers explaining the reasoning behind some of the farm bill proposals which attracted immediate opposition from Democrats. Senate Ag Chair Debbie Stabenow (D-Mich.) released what some say is a more detailed summary of her bill via a 94-page document. Thompson will be meeting this week in separate sessions with Stabenow and Senate Ag panel ranking member John Boozman (R-Ark.), who is working on a Senate farm bill alternative that features many of the same ideas contained in the House GOP farm bill proposals. It is unclear when Boozman will release his and his GOP colleagues’ ideas. House lawmakers are gearing up for another vote to potentially remove the current House Speaker, Mike Johnson (R-La.), prompted by Rep. Marjorie Taylor Greene (R-Ga.) citing growing frustration with him. USDA’s Supply & Demand Report on Friday will feature updates to old-crop usage forecasts and the first official look at the 2024-25 balance sheets.
Companies and investors are increasingly recognizing the significance of meteorological risks and are turning to a specialized area of Wall Street to mitigate them. The escalating unpredictability of climate patterns is driving the need for weather derivatives, which offer protection against weather-related financial losses. According to CME, the average trading volumes for such derivatives listed products surged by over 260% in 2023, indicating a growing demand. The market for these derivatives could potentially be valued as high as $25 billion based on notional value, showcasing the substantial scale of this niche yet crucial sector in finance.
The Canadian Food Inspection Agency (CFIA) toughened import requirements on U.S. breeding cattle due to the H5N1 virus, the agency said late Friday. Import measures for cattle from the U.S. will now include negative H5N1 test results for lactating dairy cattle, testing of milk at the retail level to look for viral fragments of the virus and voluntary testing of cows that do not have clinical signs of the virus, CFIA said.
CORN: July corn futures saw selling pressure overnight though went into the break well off session lows. Initial resistance stands at $4.60 1/2 and is backed by Friday’s high of $4.68. Support comes in at $4.53 1/4 then the psychological $4.50 mark.
SOYBEANS: July soybean futures saw modest profit-taking overnight. Initial resistance stands at $12.19 and is quickly backed by the 100-day moving average at $12.21 1/2. Further buying targets resistance at $12.25 3/4. Support comes in at the psychological $12.00 mark, then the 10-day moving average at $11.90 1/4.
WHEAT: July SRW futures faced selling pressure overnight. Bulls next objective is closing prices above the 200-day moving average, which currently stands at $6.24 3/4. Further resistance stands at $6.32 1/2. Support comes in at the 10-day moving average at $6.06, which is backed by $5.99 1/4, then $5.93 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to start the week with a mostly firmer tone, driven by continued strength in the cash cattle market. The cash cattle average is expected to rise for the second consecutive week as cash trade last week was more fruitful than originally anticipated. Still, recent hefty purchases by packers, deeply negative cutting margins and the fresh availability of contracted supplies could limit packer willingness to raise cash bids for the third consecutive week. Wholesale beef values ended Friday mixed, as Choice cutout firmed $1.30 to $294.20 and Select fell 33 cents to $287.65. Movement was relatively light at 97 loads. Dressed weights continue to show contra seasonal strength, which has weighed heavily on wholesale values.
HOGS: Lean hog futures are expected to open with a weaker tone, driven by technical selling. June futures continue to chop lower as pessimism surrounds the cash market. While the CME lean hog index was up 4 cents to $90.96 as if May 2, premiums held in both May and June futures continue to tighten, as traders expect the recent relative weakness in the index to persist. Still, if seasonal strength returns, it could limit selling pressure in futures, as premiums in May futures have slipped to $1.465 and the premium in June hogs tightened to $7.99. Wholesale pork prices were modestly higher on Friday, as cutout rose 24 cents to $98.12, though a $4.08 drop in bellies, which continue to face volatile price swings, limited cutout gains.