Ahead of the Open | June 15, 2023
GRAIN CALLS
Corn: 8 to 12 cents higher.
Soybeans: 16 to 22 cents higher.
Wheat: 8 to 12 cents higher.
GENERAL COMMENTS: Corn and soybeans were supported by weather and crop concerns overnight. Wheat followed to the upside. With more than half of U.S. corn and soybean areas now covered by some form of drought, crop worries are building. Outside markets are mildly supportive this morning, with crude oil around 50 cents higher and the U.S. dollar index about 100 points lower.
Weather models signal dryness will continue from eastern Minnesota, eastern Iowa and northeastern Missouri into western Wisconsin and parts of Illinois over the next week to 10 days. Any rains will be lighter than normal. World Weather Inc. says July weather is likely to be a little wetter, though substantial rains will be lacking. Temps are expected to be seasonal with a few bouts of above-normal readings during the next 10 days. The Delta and Southeast will continue to receive waves of rains during the next week.
The Kremlin reiterated its stance that it saw no positive prospects for renewing the Black Sea grain deal because the portions pertaining it its exports were not being fulfilled. Meanwhile, Jan Dieleman, president of Cargill’s ocean transportation business, said if the Black Sea grain deal ended the price impact would be limited “simply because it is a smaller (export) program already. The grain market is not the same as it was a year ago.”
Export sales for the week ended June 8:
Corn: Net sales of 273,300 MT for 2022-23 and 21,100 MT for 2023-24. Traders expected sales of (100,000) to 550,000 MT for 2022-23 and 0 to 350,000 MT for 2023-24. Exports of 1.193 MMT were down 4% from the previous week and 10% from the four-week average.
Soybeans: Net sales of 478,400 MT for 2022-23 increased notably from the previous week and the four-week average. Net sales of 48,500 MT for 2023-24. Traders expected sales of 250,000 to 550,000 MT for 2022-23 and 100,000 to 350,000 MT for 2023-24.
Wheat: Net sales of 165,000 MT for 2023-24. Traders expected sales of 200,000 to 450,000 MT for 2023-24.
CORN: December corn futures pushed above the 100-day moving average and Tuesday’s high overnight. The contract hasn’t closed above the 100-day moving average since last November, so that would be a milestone for bulls if they can achieve it today. Next resistance is in the $5.71 to $5.76 range, with the 200-day average at $5.83 3/4. Support is in the $5.55 to $5.47 range.
SOYBEANS: November soybean futures surged above the 100-day moving average and this week’s highs overnight. Next resistance is at $12.85 3/4, followed by the 100-day moving average around $12.95. Near-term support is in the $12.52 to $12.47 range.
WHEAT: July SRW futures remain in the long-term downtrend drawn off the highs from last October and November. That trendline intersects around $6.56 today and will serve as key resistance. Near-term support is at $6.25 1/2.
CATTLE: Lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open lower on followthrough selling after sharp losses and a low-range close on Wednesday. Key today will be whether buyers show up under the market or fresh sell stops are uncovered. Futures are trading sharply below the cash market, which should help limit seller interest, though technical selling could temporarily override fundamentals. Packers have been slow to establish cash cattle bids, with only limited trade at lower prices in the far northern market. However, that was too light for a true early test of this week’s likely trade. Most cash sources expect prices to be steady/firmer, though some believe prices could weaken if futures actively extend Wednesday’s losses. Choice beef continues to charge higher, gaining another $1.07 yesterday, while Select dropped 22 cents. USDA reported net beef sales of 12,800 MT for 2023, unchanged from the previous week but down 23% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone amid firming cash fundamentals. But premiums in nearby futures could limit buyer interest. The CME lean hog index is up another 84 cents to $86.25 (as of June 13), now more than $15.00 off the April low. July lean hog futures assumed lead-month status at more than a $6.50 premium to the cash index, suggesting traders expect prices to continue the steady climb over the next month. The pork cutout value firmed 21 cents on Wednesday to $89.73, the highest level since December 2021. USDA reported net pork sales of 26,700 MT for 2023, up 5% from the previous week but down 2% from the four-week average.
