Ahead of the Open | May 7, 2024

Corn, soybeans and wheat each pulled back from robust gains on Monday overnight, with wheat leading the way lower.

Pro Farmer's Ahead of the Open
Pro Farmer’s Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 1 to 3 cents lower.

Soybeans: 6 to 8 cents lower.

Wheat: SRW 11 to 14 cents lower; HRW 19 to 22 cents lower; HRS 15 to 17 cents lower.

GENERAL COMMENTS: Corn, soybeans and wheat each pulled back from robust gains on Monday overnight, with wheat leading the way lower. The key will be if buyers show up on the day time open, as they did on Monday. Outside markets are quiet this morning, as front-month crude oil futures are trading modestly lower and near recent lows and the U.S. dollar index is trading around 70 points higher.

USDA rated the winter wheat crop 50% “good” to “excellent,” up one percentage point from the previous week. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop inched up 0.1 point to 317.5, the first increase this spring, though top producer Kansas dropped 1.2 points. The SRW CCI rating fell 4.3 points, the first decline this spring, led by a 3.6-point drop in top producer Illinois.

South American crop consultant Dr. Michael Cordonnier cut his Argentine corn crop estimate another 2 MMT to 47 MMT, noting falling yields and increased impacts from corn stunt disease. The disease will have a greater impact on later-harvested corn acres, so Cordonnier warned there could be additional cuts to his production estimate. He left his Argentine soybean production forecast at 51 MMT. Cordonnier left his Brazilian soybean and corn production estimates at 147 MMT and 112 MMT, respectively, as he evaluates impacts from flooding in far southern Brazil and dry weather in south-central safrinha corn areas.

Statistics Canada estimated March 1 Canadian all-wheat stocks at 11.756 MMT, down 15.4% from last year and below expectations of 12.2 MMT. Canola stocks were estimated at 8.263 MMT, up 17.5% from year-ago, though slightly lower than the 8.3 MMT analysts expected.

Strong to severe showers and thunderstorms brought rain to areas from the eastern Dakotas and western Minnesota to eastern Kansas and central and western Missouri Monday, while parts of the Ohio River Basin also received rain with other areas mostly dry, says World Weather Inc. The Midwest will see regular rounds of rain during the next two weeks, with the frequency and intensity of the rain declining Friday, with gradual improvements in conditions for fieldwork during the next two weeks.

House Ag Chair Glenn “GT” Thompson (R-Pa.) will reportedly release the House farm bill several days before the panel’s May 23 markup. House Ag Democrats are meeting this afternoon to discuss farm bill plans.

CORN: July corn futures saw modest profit taking overnight. Initial resistance stands at the overnight high of $4.72 and is backed by $4.75. Support stands at $4.62 3/4 and is quickly reinforced by the Mar. 28 high of $4.60, then $4.54 1/2.

SOYBEANS: July soybean futures faced corrective selling overnight. Bulls’s next target is the 200-day moving average at $12.59, with additional resistance at $12.48 3/4 on the way. Initial support at $12.40 capped losses overnight, while additional support lies at $12.25 3/4.

WHEAT: July SRW futures saw selling pressure overnight, though maintained most of Monday’s gains. Bulls are eyeing initial resistance at the overnight high of $6.53 3/4 before tackling resistance at $6.66, the Dec. 6 high. Support stands at $6.33 1/4 then the 200-day moving average at $6.25.

LIVESTOCK CALLS

CATTLE: Choppy/lower.

HOGS: Choppy/lower.

CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone as buyers continue to struggle garnering any bullish momentum, though steep discounts to the cash market could limit selling pressure. Last week’s cash cattle average posted gains for the second consecutive week, rising $1.59 to $185.74. The outlook for this week continues to be higher for the cash cattle market, though continued poor packer margins and strong purchases the last two weeks could limit packers’ willingness to pay up for cattle. Wholesale beef values surged higher Monday, as Choice cutout jumped $4.56 to $298.76 and Select firmed $2.10 to $289.75.

HOGS: Lean hog futures are expected to open with a mostly weaker tone as prices continue to break down technically, though oversold conditions and modest premiums to the cash index could limit selling pressure after the open. Bulls have struggled to maintain any corrective bounce as prices have trended lower over the past couple of weeks. The CME lean hog index is down 16 cents to $90.80 as of May 3, marking declines in five of the past eight days. However, pork cutout surged on Monday, rising $1.38 to $99.50, driven higher by gains in bellies and loins, with movement improving to an impressive 305.37 loads for a Monday.