Market Snapshot | July 7, 2023

Corn is marking 9- to 11-cent gains at midmorning.

• Corn futures are encountering strength as the Midwest continues to battle dry conditions despite recent rains.
• The latest drought monitor map shows minor improvements nationally with 51.8% of the nation remaining in a drought category, down 1.7 percentage points from last week. Much of the Midwest remains in a drought category, with almost 88% in a dry category, but that is down from nearly 91% last week.
• Ethanol production increased 8,000 barrels per day (bpd) to an average of 1.060 million bpd during the week ended June 30. That was 1.5% above the same week last year. Ethanol stocks declined 719,000 barrels to 22.26 million barrels.
• December corn is trading near Wednesday’s high. Resistance stands at $5.03, while support lies at Wednesday’s low of $4.85 1/2.

Soybeans are mostly 11 to 13 cents lower, while meal futures are around $1.00 lower. Soyoil is about 160 points lower.

• Soybeans are consolidating in a sideways pattern following Monday’s failed upside breakout above the June highs.
• Northern portions of the Midwest and Canada’s Prairies are expecting a dry biased weather pattern over the coming week to 10 days, which may raise some crop stress, especially once warmer weather returns next week, notes World Weather Inc. Meanwhile, lower portions of the Midwest, Delta and the Southeast will experience a favorable mix of weather.
• A reduced chance of a “very strong” version of the El Niño weather phenomenon later this year should offer some relief to agricultural producers in Argentina, according to the Rosario Grain Exchange.
• Malaysian palm oil futures rose overnight with market sentiment strengthening on forecasts of lower June production and expectations of an increase in exports.
• November soybeans are pivoting around last week’s high with Wednesday’s high of $13.78 3/4 serving as initial resistance, while support lies at the 200-day moving average of $13.33.

SRW wheat is mostly 11 to 13 cents lower, while HRW wheat is mostly a penny lower. HRS wheat is 1 to 2 cents higher.

• SRW wheat futures are handing back a portion of Wednesday’s gains.  
• Portions of U.S. HRW wheat country will be too wet in the coming week, resulting in some grain quality declines, especially in Kansas and northern Oklahoma, states World Weather Inc.
• SovEcon raised its 2023-24 Russian grain export forecast to a record 58.9 MMT, including 47.2 MMT of wheat.
• This year’s French soft wheat harvest is expected to see a yield 5% above the 10-year average, helped by good sowing conditions and regular rains in early spring, according to crop institute Arvalis and grain industry group Intercereales.
• September SRW wheat is trading inside Wednesday’s broad range, with the 20-day moving average of $6.78 1/2 limiting upside, while the 40-day moving average of $6.56 and support at $6.53 1/2 are serving as support.

Live cattle and feeders are posting heavy losses.

• Live cattle are experiencing followtrhough selling from Wednesday’s sharp losses, though bullish fundamentals and sturdy technical posture should help underpin futures.
• Cash sources are split on whether prices will drop again or break the three-week string of losses. But the active followthrough selling in futures could sway feedlots to sell hedged cattle at lower prices despite tight supplies.
• Wholesale beef prices dropped sharply on Wednesday with a $5.56 drop in Choice to $322.78, while Select fell $1.61 to $292.69, taking the Choice/Select spread to $30.09.  Movement totaled 101 loads.
• August live cattle gapped lower at the open, falling below initial support near $174.16, with the 10-day moving average of $173.66 serving as additional support. Initial resistance stands at Wednesday’s close of $174.95.

Lean hogs are posting strong gains at midsession.

• July lean hogs are pushing higher for the eighth straight session as cash fundamentals and technicals continue to strengthen.
• The CME lean hog index is up another 37 cents to $94.68 as of July 3.
• The pork cutout value rose 69 cents on Wednesday to $108.69, while movement totaled 259.4 loads.
• August lean hogs have traded as high as $100.75, the highest intraday level since mid-March. Initial resistance stands at $101.79. Initial support lies at Wednesday’s close of $97.45.