Market Snapshot | June 6, 2023

Corn futures are 2 to 8 cents higher, with nearby futures leading gains.

• Nearby corn futures are trading moderately higher but have slipped from the overnight high as outside markets weigh on commodities.
• USDA rated 64% of the corn crop “good” to “excellent,” down five points from the previous week and three points lower than traders expected. Ratings dropped in each of the top five corn production states—Iowa, Illinois, Nebraska, Minnesota and Indiana.
• Crop Consultant Dr. Michael Cordonnier lowered his corn yield by 1 bu. to 179 bu. per acre, citing a drier bias across the Corn Belt. He now forecasts corn production at 14.94 billion bushels.
• Midwest cooling and expected rainfall during the next week to 10 days will offer some relief to recent drying and crop moisture stress, according to World Weather. Though, the forecaster notes a full restoration of soil moisture is not likely and many areas will remain on a path for below-average rainfall this month.
• July corn tested initial resistance of $6.09 1/4 for the third straight session but is currently pivoting around $6.05. Initial support lies at the 40-day moving average of $5.97 3/4.

Soybeans are 7 to 13 cents higher. July meal futures are modestly lower. July soyoil is more than 120 points higher.

• Soybeans have rebounded modestly from overnight weakness, though meal losses are capping gains.
• USDA reported daily soybean sales totaling 165,000 MT to Spain for 2022-23.
• USDA initially rated 62% of the soybean crop “good” to “excellent,” three points lower than traders expected.
• Cordonnier kept is soybean yield and production forecasts unchanged at 52 bu. per acre and 4.53 billion bu., respectively, noting dry conditions in June do not necessarily translate to lower yields if weather turns more favorable later in the growing season.
• July soybeans are trading mostly within initial resistance of $13.59 3/4 and initial support at $13.41 3/4.

SRW wheat is mostly 4 to 6 cents higher, while HRW is down 5 to 6 cents. HRS wheat is mostly 6 to 9 cents lower.

• SRW futures are trading higher along with corn and soybeans, while the other markets have softened.
• Ukraine’s Nova Kakhovka dam was damaged in a blast, which will result in reduced water supplies crucial for agriculture in southern Ukraine. The act has been described as “ecocide” by an official in Kyiv, implying international environmental destruction.
• Australia’s wheat production is forecast to plunge 34% to 26.2 MMT after record production in 2022-23, according to the according to the Australian Bureau of Agricultural and Resource Economic Sciences (ABARES).
• July SRW wheat traded as high as $6.48, in a test of resistance at $6.47 3/4. The 20-day moving average of $6.20 3/4 is serving as initial support.

Live cattle and feeders are moderately to sharply higher.

• Live cattle futures are extending higher for the ninth straight session as solid cash fundamentals prevail.
• Cash cattle trade averaged $182.03 last week, up $4.06 from the previous week and a record high. While packers purchased a large amount of cash cattle the past two weeks, the first couple weeks of June are typically some of the largest slaughters of the year.
• Wholesale beef prices surged on Monday with a $4.26 gain in Choice to $314.19 and $5.80 jump in Select to $296.73, narrowing the Choice/Select spread to $17.46. Movement was light, however, at 98 loads.
• August live cattle are trading around Monday’s high at $174.425. Support lies at $172.475.

Lean hogs are marking strong gains at midsession.

• June lean hogs are higher as the cash index rises amid tightening supplies.
• The CME lean hog index rose 69 cents to $81.21 as of June 2, the highest level since mid-December. This year’s seasonal rally in the cash hog market was delayed but appears to be picking up steam as market-ready supplies gradually tighten.
• The pork cutout value rose $4.34 on Monday, led higher by a $24.51 increase in bellies. Movement was notable at 295 loads.
• August lean hogs gapped higher at the open and are hovering above the 20-day moving average of $82.65, with $83.525 serving as initial resistance. Additional resistance stands at $84.80.