Market Snapshot | July 11, 2023

Corn is around a penny higher at midmorning.

• Corn futures are taking strength from soybeans and the wheat complex.
• USDA raised its “good” to “excellent” crop conditions rating to 55%, a four-point increase; one percentage point more than traders expected. When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop improved 5.1 points to 344.6, though that was still 20.5 points (5.6%) behind last year at this time.
• Concern over ongoing dryness in Minnesota, Wisconsin, parts of Iowa, northwestern Illinois and Missouri remains, notes World Weather Inc. A part of this region will get some relief in the coming week while other areas will require additional rain.
• Crop consultant Dr. Michael Cordonnier left his corn yield forecast unchanged this week. He forecasts the U.S. corn crop at 15.10 billion bu. on a yield of 175 bu. per acre.
• December corn continues to consolidate in a sideways range between $5.07 3/4 and $4.94 3/4, forming a sizable bear flag after the sharp price break. Bulls would need a close above last week’s high of $5.09 1/2 to negate it, while a close below $4.85 1/2 would confirm a downside breakout.

Soybeans are mostly 5 to 7 cents higher, while meal futures are more than $6.00 higher. Soyoil is modestly lower.

• Soybeans are extending Monday’s gains, with strength in meal futures supporting the complex.
• USDA upped its “good” to “excellent” crop condition ratings to 51%, a one-point increase. On our weighted CCI, the soybean crop improved 3.3 points to 331.7, which was still 24.7 points (6.9%) below year-ago.
• Cordonnier kept his soybean yield unchanged at 50.5 bu. per acre this week, and forecasts the U.S. soybean crop at 4.17 billion bushels.
• Malaysian palm oil futures reversed early gains to end lower on Tuesday as traders weighed on expectations of rising production against improving export demand.
• November soybeans tested initial resistance at $13.60, with additional resistance at $13.74 1/2. Monday’s close of $13.45 1/2 is providing support.  

Wheat futures are mostly 7 to 11 cents higher.

• SRW wheat is edging higher amid supportive outside markets and global supply concerns as the deadline for the Black Sea grain deal is less than a week away.
• USDA’s spring wheat ratings fell to 47% “good” to “excellent,” down one point from the previous week. On our weighted CCI, the spring wheat crop dropped another 5.1 points to 328.4, which trails last year at this time by 47.2 points (12.6%).
• World Weather notes concern over unharvested grain quality continues for U.S. HRW wheat in parts of Oklahoma and Kansas due to too much rain and more coming, though the latest data from USDA suggests much of the crop has been harvested from the wetter areas.
• Russian drone attacks on the Ukrainian region of Odessa resulted in fires at two port terminals, including one grain facility. Oleg Kiper, head of Odessa Oblast (province) Military Administration, said Ukrainian anti-aircraft defenses foiled “the enemy’s plan to attack the grain terminal.”
• This year’s soft wheat crop in France is expected to rise by nearly 4% from last year, helped by June showers ahead of harvesting, according to the farm ministry.
• September SRW wheat have edged above the 40- and 10-day moving averages of $6.56 1/4 and $6.61 3/4, with additional resistance at $6.67 1/4. Initial support continues to serve at $6.39.

Live cattle are mostly firmer while feeders are mostly weaker.

• Live cattle are trading mostly sideways despite futures holding a discount to the cash market.
• The average cash cattle price rose 73 cents to $182.06 last week, as stronger prices in the northern market offset weaker values in the Southern Plains. This week’s cash tone is likely to be mixed again given supply shortages, which means the number of head traded in each region will determine the overall price trend.
• Wholesale beef prices continued to slide lower on Monday, with a $3.11 drop in Choice to $313.79 and $3.30 decline in Select to $282.33, taking the Choice/Select spread to $31.46. Movement totaled 106 loads.
• August live cattle are trading narrowly within Monday’s range.

Lean hogs are moderately to sharply higher at midsession.

• July lean hogs continue to find support amid persisting strength in cash fundamentals.
• The CME lean hog index rose another 72 cents to $98.15 as of July 7.
• The pork cutout value rose a penny on Monday to $107.95, while movement was light at 226.3 loads.
• August lean hogs are trading within Monday’s range. The 10-day moving average near $94.01 is providing support, while resistance remains at $96.125.