Corn: Steady to 2 cents higher
Soybeans: 4 to 6 cents lower
Wheat: 1 to 3 cents higher
Corn and wheat futures were mildly firmer, while soybeans were weaker overnight. We expect similar price action on the open this morning, but a strengthening U.S. dollar is likely to curb buyer interest.
Corn futures built on Tuesday’s solid price performance overnight. Forecasts calling for a rainy seven-day outlook across portions of the Corn Belt are fueling some thoughts not all corn acres will get planted. But traders are also keeping a watch on longer-term forecast models that are signaling warmer- and drier-than-normal weather may be in store for summer.
Soybean futures were pressured overnight by uncertainty with trade talks. Traders are anxiously waiting to see if the U.S. and China can reach a deal. Meanwhile, there’s doubt whether NAFTA talks will be completed by the informal May 17 deadline House Speaker Paul Ryan (R-Wis.) said needs to be met in order for Congress to vote on any new trade pact this year. Also, U.S. soybean prices are premium to Brazilian soybeans, though Brazil typically dominates global trade at this time of year.
Wheat futures worked higher on corrective buying overnight amid ideas the recent price drop was overdone. But the firmer dollar and seasonal pressure will limit buying.
Cattle: Choppy to higher
Hogs: Choppy to higher
Live cattle futures faced active followthrough selling Tuesday, but rebounded off session lows into the close. While cash cattle trade got started at $5 to $6 lower prices in the Plains compared to last week, the $116 to $117 cash prices are sharply above levels where live cattle futures are trading. That sets the market up for some corrective buying today. But any corrective buying will be limited as traders want to maintain a big discount structure as they fear a “wall” of cattle.
Lean hog futures faced moderate to heavy selling pressure yesterday, but also finished well off session lows. As a result, we anticipate a corrective rebound this morning, fueled by yesterday’s $1.52 rise in the average cash hog price and a 55-cent gain in the pork cutout value. But the still-big premiums summer-month hogs hold to the cash index will likely limit buying.