Market Snapshot | June 21, 2023

Corn is edging 17 to 22 cents higher at midmorning.

• Corn futures are notably higher following USDA’s lower-than-expected crop ratings released following Tuesday’s close.
• USDA cut its corn crop ratings more than expected to 55% “good” to “excellent.” On the Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop plunged 14.4 points to 346.5. CCI ratings were led lower by a nearly 4-point drop in Illinois and just over a 3-point decline in Iowa. CCI ratings are now 29.7 points below year-ago.
• Concerns linger over dryness in the heart of the Midwest where rainfall has been well below normal this month and where it is likely to continue quite dry into the weekend, though rain in parts of the driest region is possible Saturday into Monday morning and again late next week, but resulting rainfall is unlikely to fix long-term moisture deficits.
• The U.S Environmental Protection Agency has finalized biofuel blending volumes for the next three years, but finalized volumes include just 15 billion gallons of conventional biofuels like corn-based ethanol in all three years, plus a 250 million-gallon supplemental amount for 2023.
• July corn gapped higher overnight and edged above resistance at $6.48 1/2, $6.53 ½ and $6.60 1/4. The next area of resistance will stand at the Dec 30 high of $6.77 1/2, while support lies at the 200-day moving average of $6.44 1/4.

July soybeans are posting 30-plus cent-gains, while new from is around 20 cents higher. July meal futures are nearly $24.00 higher, while July soyoil is down the limit of 400-points.

• Nearby soybeans are up for the fourth straight session amid U.S. production concerns following lackluster USDA ratings, though limit down losses in soyoil are likely crimping gains.
• USDA trimmed its soybean crop rating more than expected to 54% “good” to “excellent,” with the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect) the soybean crop fell 10.6 points to 339.9, which is 26.1 points below year-ago. Illinois and Iowa led the decline in ratings.
• Malaysian palm oil futures fell more than 3% on Wednesday following news of U.S. plans to implement a smaller biofuel mandate that it had initially proposed. Soyoil plummeted following the news.
• July soybeans gapped higher at the open and has traded as high as $15.21 1/4, breaching resistance at $14.91, $15.04 3/4 and $15.20 1/2. Additional resistance stands at the Feb 22 high of $15.41 1/2, while Tuesday’s close of $14.77 1/4 is providing support.

SRW wheat is mostly 30 cents higher, while HRW is marking 32-cent gains. HRS wheat is 18 cents higher.

• SRW wheat is extending recent followthrough strength as global production concerns resurface amid questionable weather conditions in key growing regions.
• USDA’s spring wheat crop condition ratings were also reduced more than expected to 51% “good” to “excellent,” with the weighted Pro Farmer CCCI, the spring wheat rating plummeted 15.9 points to 340.7 and is now 23.5 points below year-ago.
• SovEcon cut its Russian wheat crop forecast by 1.2 MMT to 86.8 MMT due to worsening crop conditions for spring wheat in the main growing regions—Siberia, the Volga Valley and the Urals.
• July SRW wheat gapped higher overnight and has reached as high as$7.28, breaching resistance at $7.05 and $7.14 1/4, with additional resistance standing at $7.28 3/4. Support lies at Tuesday’s high of $7.00.

Live cattle are mixed, with mild strength in deferred contracts, while feeders are plummeting amid strength in grains.

• Live cattle have turned from earlier lows to post modest losses as traders are hesitant to build a steeper discount to the cash market.
• While futures continue at a notable discount to the cash market, cash cattle prices are expected to trade lower this week after falling $3.83 last week.
• Wholesale prices fell on Tuesday with Choice down $3.23 to $336.91 and Select $2.83 lower to $307.93, while movement totaled 121 loads for the day. Seasonally, wholesale beef prices are likely to weaken into July.  
• August live cattle gapped lower at the open, and has tested initial resistance at $168.76, while resistance stands at the 20-day moving average of $170.13.

Lean hogs are posting modest losses at midsession.  

• July lean hogs are moderately lower amid mild corrective selling following a recent string of consecutive gains.
• The CME lean hog index is up another 54 cents to $88.75 as of June 19.
• The pork cutout value fell $1.44 on Tuesday to $94.62, ending a five-day string of gains, but remains in a seasonal uptrend from the April lows.
• August lean hogs are trading within Tuesday’s range, with $91.71 serving as initial support, while resistance stands at Tuesday’s high of $93.375.