Ahead of the Open | June 12, 2023
GRAIN CALLS
Corn: 6 to 12 cents higher.
Soybeans: 2 to 5 cents higher.
Wheat: 2 cents lower to 2 cents higher.
GENERAL COMMENTS: Corn and soybeans traded higher overnight amid weather concerns, though they pulled back from their highs at the end of the session. Wheat posted two-sided trade overnight. Crude oil futures are more than $2.00 lower this morning, which could limit buyer interest in grain and soy futures. The U.S. dollar index is around 100 points lower.
Rains will be lighter than normal across the Corn Belt during the next 10 days. World Weather Inc. says ridge building is expected over the Plains and western Corn Belt during the second week of the outlook, which would warm up temps and keep rainfall limited. Corn and soybean crop stress will rise this week because of limited rainfall and the return of warmer temperatures late this week into next week.
AgRural said Brazil’s safrinha corn harvest reached 2.2% done as of a last Thursday, behind last year’s 6.6% pace on the date. The firm says safrinha corn is developing favorably, though attention will be temps the second half of the month with a cooldown expected. AgRural estimates Brazil’s total corn crop at a record 127.4 MMT.
India has imposed a limit on the amount of wheat stocks traders can hold in an effort to bring down domestic prices. New Delhi will also provide 1.5 MMT of wheat to bulk consumers such as flour millers, as part of efforts to lower prices.
CORN: July corn futures pushed above last week’s highs overnight. Near-term resistance is in the $6.18 to $6.23 range, including the 100-day moving average at $6.21 3/4. Near-term support starts at the 5-day moving average around $6.08 1/2.
SOYBEANS: July soybean futures gapped higher overnight and cleared the 40-day moving average. While the gap was filled, bulls have the solid short-term upper hand. Near-term resistance is at the psychological $14.00 mark and then the 50-day moving average near $14.04 1/2. Near-term support is at the 5-day moving average at $13.70 1/2.
WHEAT: July SRW futures are being supported by strengthening corn and soybean futures. Last week’s spike high at $6.48 is near-term resistance. Near-term support is in the $6.27 to $6.17 3/4 range.
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mixed tone. Traders start the week with expectations the cash cattle market will continue to strengthen after another round of record prices last week. Despite record cash prices, nearby futures continue to trade at hefty discounts, signaling traders’ overall cautious stance, which is likely to continue. Wholesale beef prices continued their recent rally, with Choice up $4.20 and Select $1.61 higher on Friday. Movement totaled only 81 loads, signaling retailers may be becoming more selective buyers at the lofty price levels.
HOGS: Lean hog futures are expected to open with a mostly firmer tone amid a continuation of the seasonal price recovery in the cash market. But buyer interest is likely to be limited by premiums in summer-month contracts. The CME lean hog index is up another 48 cents (as of June 8), extending its seasonal rally. June hog futures, which expire Wednesday and are cash settled on Friday, finished last Friday at a $3.595 premium to the cash index. July hog futures held a $5.345 premium to today’s cash quote. The pork cutout value firmed $2.71 on Friday amid strength in all cuts, while movement totaled 295.7 loads.
