GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 5 to 7 cents lower.
Wheat: SRW 5 to 7 cents lower; HRW 8 to 10 cents lower; HRS 3 to 5 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each saw modest continued profit taking overnight with wheat leading to the downside. Similar to yesterday, the key will be if buyers once again show up following the open. Outside markets are unfavorable this morning though volatility is limited, as front-month crude oil futures are trading lower and near two-month lows and the U.S. dollar index is trading around 120 points higher.
Oklahoma’s winter wheat crop is estimated at 89.161 million bu. on an average yield of 33.68 bu. per acre, the Oklahoma Wheat Commission said, based on field assessments by Oklahoma State University Extension educators, private crop consultants and area agronomists. The average wheat production estimate among members surveyed at a meeting of the Oklahoma Grain & Feed Association, where the tour numbers were released, was higher at 102.2 million bu. with a yield of 37.3 bu. per acre. Last year, Oklahoma produced a winter wheat crop of 68.6 million bushels. USDA’s initial winter wheat crop estimates will be released Friday.
The Brazilian government is preparing a temporary measure to authorize the national crop agency Conab to import up to 1 MMT of rice to control prices after recent flooding Rio Grande do Sul. The special measure was in response to the extensive damage caused by torrential rains in Rio Grande do Sul, a state that normally accounts for around 70% of the Brazil’s rice production. Conab plans to initially import 200,000 MT of rice. If prices stabilize, the government will suspend other imports.
China is flooding the U.S. with used cooking oil that the biofuels industry says may be tainted, Bloomberg reports. U.S. imports of used cooking oil, an ingredient to make renewable diesel, more than tripled in 2023 from a year earlier, with more than 50% coming from China, according to the U.S. International Trade Commission. American industry groups and biofuels executives are becoming increasingly worried that a significant amount of those supplies are fraudulent, and are urging the government to tighten scrutiny on the imports. One of the biggest concerns is that Chinese shippers are adding used cooking oil to fresh palm oil. The heightened suspicions come after the European biofuels industry expressed similar concerns about cooking oil from China last year.
The Corn and Soybean Belts will continue to see frequent precipitation events for the next ten days with some areas experiencing brief opportunities for fieldwork, notes World Weather Inc. Frost and freezes are expected in Argentina early next week, with cold temperatures stemming as far north as southern Buenos Aires, where some late planted soybeans could be impacted.
CORN: July corn futures saw continued selling pressure overnight. Bulls initial target is closing prices above $4.69 with additional resistance at the psychological $4.75 mark. Support comes in at $4.62 and is backed by the 10-day moving average at $4.58 3/4.
SOYBEANS: July soybean futures continue to face profit taking ahead of Friday’s USDA reports. Initial resistance stands at the psychological $12.50 mark and is backed by Monday’s for-the-move high at $12.56 1/2. Support comes in at $12.40 with backing from $12.30 3/4 then $12.25.
WHEAT: July SRW futures saw corrective selling overnight. Initial resistance now stands at $6.36 and is backed by Monday’s close at $6.48 3/4. Bulls are seeking to hold support at $6.33 1/4, which is reinforced by the 200-day moving average at $6.25 1/4, then $6.20 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone on continued technical weakness. While futures closed higher Tuesday, prices finished near session lows as sellers actively sold the rally. Still, reports of robust packer demand early this week could underpin futures if cash cattle trade develops at steady to higher prices as packers continue to purchase large amounts of cattle from the negotiated market. Wholesale beef prices ended Tuesday mixed as Choice cutout fell 27 cents to $298.49 and Select firmed $2.59 to $292.34, narrowing the Choice/Select spread to $6.15. Movement was decent at 100 loads.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as technical selling persists, though prices are nearing oversold levels, which could limit selling after the open. June futures attempted to break above the psychological $100.00 mark on Tuesday and reversed lower, closing nearer session lows. The seasonal rally in the CME lean hog index has paused after reaching a short-term peak at $91.64 on April 23. The most recent quote for the index rose 24 cents to $91.03 as of May 6, though prices have dipped five of the last nine days. Wholesale pork values slipped $2.41 to $97.09 on Tuesday, driven lower by bellies and loins, which pushed cutout values higher on Monday.