Market Snapshot | June 7, 2023

Market Snapshot
Market Snapshot
(Pro Farmer)

Corn futures are 2 to 10 cents lower, with heavier losses in new-crop contracts.

  • Nearby corn has declined from earlier highs, as deferred contracts and wheat weigh on prices despite supportive outside markets.
  • Cooler temps throughout the Midwest during the coming week will help conserve soil moisture, although anticipated rainfall will be restricted, according to World Weather. The forecaster notes most areas will get “some” rain, but a general soaking rain will elude key production areas.
  • Ethanol production averaged 1.036 million barrels per day (bpd) during week ended June 2, a 32,000-bpd increase from the previous week, but was down 0.3% from the same week last year. Ethanol stocks rose 616,000 barrels to 22.948 million barrels, though that was down 688,000 barrels (2.9%) from last year.
  • The destruction of the Kakhovka dam will flood tens of thousands of hectares of agricultural land in southern Ukraine and could turn at least 500,000 hectares of land left without irrigation into “deserts,” the country’s agriculture ministry said.
  • July corn futures are holding within the recent consolidation range. Near-term resistance is at Monday’s high of $6.14. Near-term support is at the 50-day moving average at $6.03 1/2 and then $6.00.

Old-crop soybeans are higher, while new-crop contracts are lower. July meal futures are more than $3.00 higher and July soyoil is modestly higher.

  • Nearby soybeans are edging higher, led by gains in meal futures.
  • Deferred contracts are being pressured by forecasts calling for some rains across most areas of the Midwest during the next week. Broad, soaking rains are not expected.
  • China imported a record 12.02 MMT of soybeans during May, up 68% from April and 24% above year-ago, as cargoes delayed by strict inspections were unloaded at ports. June imports could prove even larger as active shipments of Brazilian supplies arrive at Chinese ports.
  • July soybeans are trading within the upper end of Tuesday’s range but the contract continues to find solid resistance at $13.64 3/4. A push above the level will find $13.76 1/4 serving up resistance. The 20-day moving average at $13.46 1/2 is providing initial support.

SRW wheat is mostly 12 to 14 cents lower, while HRW posts 22- to 27-cent losses. HRS wheat is mostly 15 to 17 cents lower.

  • Wheat futures are posting losses, with HRW wheat leading the complex lower.
  • World Weather indicates less rain and more sunshine will occur in HRW wheat areas in the next two weeks, which will allow harvest to ramp up.
  • Around one-third of the wheat across southern Henan, known as the granary of China, reportedly has sprouted from recent heavy rains. As we reported last week, an estimated 30 MMT of China’s wheat crop was impacted by the adverse late-season weather, which will result in an abundance of wheat — and the need for Chinese millers to import more high-quality wheat.
  • July SRW wheat has traded as low as $6.13 1/4. Initial resistance is at the confluence of the 10- and 20-day moving averages of $6.26 3/4.

Live cattle and feeders are higher at midsession.

  • Live cattle are trading moderately to sharply higher after posting fresh contract highs following gap-higher open.
  • Futures reached an all-time high on the continuation chart, as traders continue to follow the cash market higher.
  • Wholesale prices are also rising solidly higher, with a $7.21 jump in Choice to $321.40—the highest level since September 2021 — and a $2.71 increase in Select to $299.44, taking the Choice/Select spread to $21.96. Movement was notable at 126 loads.
  • August live cattle gapped higher at the open and have traded as high as $178.10, testing resistance at $177.88, with additional resistance at $179.82. Support lies at Tuesday’s high of $175.95.

Lean hogs are mixed in midmorning trade.

  • Some lean hogs contracts are encountering mild profit-taking following a steady move higher from the May 26 low.
  • The CME lean hog index rose another 65 cents to $81.86 as of June 5, extending the seasonal price climb. The cash market must start posting stronger daily gains to continue the recent move higher in futures given their premiums.
  • The pork cutout value dropped $4.08 on Tuesday to $84.98, mainly due to a near $24 drop in primal bellies. Movement was strong at 335.1 loads.
  • August lean hogs are trading within the previous session’s range, with initial resistance standing at Tuesday’s high of $84.85, while support lies around the 20-day moving average near $82.54.
 

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