Market Snapshot | June 15, 2023

Corn is 12 to 17 cents higher at midmorning.

• Corn is posting strong gains amid persisting dry weather concerns.
• According to the most recent Drought Monitor, almost 90% of the Midwest is considered “too dry.” Most of Iowa remains in a drought zone, and there was a 25% increase in higher drought categories (D1 to D4) to 67.6% for the state.
• USDA reported net old-crop corn sales of 273,300 MT for week ended June 8, which were with pre-report estimates ranging from (100,000) and 550,000 MT. New-crop sales of 21,100 MT were reported during the week, near the low-end of the expected range of 0 to 350,000 MT. Exports of 1.193 MMT were down 4% from the previous week and 10% from the four-week average.
• July corn has traded as high as $6.20 1/2, not quite breaching the 100-day moving average, which is serving up solid resistance. Support lies around Wednesday’s close of $6.07 3/4

Soybeans are 30-plus cents higher, while July meal futures are around $2.00 higher. July soyoil is around 170 points higher.

• The soy complex is surging higher, with strong gains in soyoil solidifying strength in soybean futures.
• Weather concerns are triggering buying in soybeans as drought continues to intensify and spread across soybean production areas.
• USDA reported net old-crop soybean sales of 478,400 MT for week ended June 8, which were near the top-end of the pre-report range between 250,000 and 550,000 MT and up notably from the previous week and the four-week average. New-crop sales of 48,500 MT were reported, below the expected range from 100,000 to 350,000 MT. 
• Malaysian palm oil futures rose overnight for a third straight session, lifted by concerns over hot weather cutting output of both the edible oil and rival U.S. soybeans.
• July soybeans have extended as high as $14.23, working above resistance at $13.98 1/4, $14.08 and $14.17 1/4, with further resistance standing at the 100-day moving average of $14.44 1/2.

SRW wheat is 13 to 16 cents higher, while HRW is mostly 14 cents higher. HRS wheat is 17 to 19 cents higher.

• The wheat complex is working higher amid spillover from the corn and soybean markets, looming global supply concerns and supportive outside markets.
• The Kremlin reiterated its stance that it saw no positive prospects for renewing the Black Sea grain deal because the portions pertaining to its exports were not being fulfilled. 
• USDA reported net new-crop wheat sales of 165,000 MT, missing the expected range of 200,000 to 450,000 MT. Top purchasers for the week were Mexico, Vietnam and Chile.
• July SRW wheat has reached as high as $6.47 3/4, in a test of resistance at $6.45 1/4. Support remains around the 10-day moving average of $6.29.

Live cattle are modestly lower while feeders are posting sharp losses.

• Live cattle are posting followthrough weakness in the wake of Wednesday’s strong losses, though seller interest is limited by the big discounts futures hold to the cash market.
• Packers have been slow to establish cash cattle bids, with only limited trade at lower prices in the far northern market. Though it was too light for a true early test of this week’s likely trade. Most cash sources expect steady/firmer prices, but some believe prices could weaken if futures actively extend Wednesday’s losses.
• Choice beef continues to charge higher, gaining another $1.07 to $339.06, while Select fell 22 cents to $3.09.26, further widening the Choice/Select spread to $29.80. Movement was light at 97 loads.
• USDA reported net beef sales of 12,800 MT for 2023, unchanged from the previous week but down 23% from the four-week average.
• August live cattle tested support near $169.67 before rebounding off the lows. Initial resistance is at Wednesday’s close of $170.975.

Lean hogs are notching solid gains in all but the July contract at midsession.  

• Lean hogs are working higher for the fifth straight session amid firming cash fundamentals. Strength in July hogs is limited by the lead-month contract’s premium to the cash index.
• The CME lean hog index is up another 84 cents to $84.25 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 to climb steadily over the next month.
• The pork cutout value firmed 21 cents on Wednesday to $89.73, the highest level since December 2021. Movement totaled 308.1 loads for the day.
• 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.
• August lean hogs have extended as high as $91.625, above initial resistance of $90.825, with additional resistance at $91.975. Support remains around $88.25.