Ahead of the Open | July 21, 2023
GRAIN CALLS
Corn: 10 to 15 cents lower.
Soybeans: 10 to 15 cents lower.
Wheat: Winter wheat 20 to 25 cents lower; spring wheat 10 to 15 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat faced selling pressure in the overnight session. Selling could be limited once daytime trade begins, but the market continues to be driven by headlines and weather. The U.S. dollar has continued its recent corrective rebound, which is not helpful for commodity prices. Front-month crude oil futures are pressuring the highs from the past two weeks.
A few more days of mild temperatures and mostly favorable conditions for crop development will occur before temperatures turn hot next week, as rain is forecast to be infrequent and light during the next two weeks, pressuring crops and livestock through the Plains and western Corn and Soybean Belt, World Weather Inc says. Some showers are expected to relieve heat in the last days of July and early August, which will bring cooling temperatures as well.
Ukraine released a similar warning to Russia’s, announcing that ships heading into Russian ports or Russian occupied areas of Ukraine will be regarded as military vessels. This puts additional risk on grain heading out of the Black Sea. Meanwhile, a grain storage facility in the Ukrainian port city of Odesa was hit with a missile strike, damaging storage facilities and injuring two people. This was the fourth straight night of missile strikes by the Kremlin.
CORN: December corn futures faced continued selling pressure, though selling was stifled by the 40-day moving average in the overnight session. Bears want to continue pressure below $5.32 into $5.25 support, while bulls are aiming to take out the 100-day moving average at $5.48 quickly backed by the psychological $5.50 level.
SOYBEANS: November soybean futures continue to struggle against the $14.00 psychological level with bears pressuring prices lower in the overnight session. Yesterday’s close marks first resistance at $14.04 3/4, backed by Wednesday’s high of $14.28 3/4. Sellers want to pressure price into 10-day moving support at $13.75 then then additional daily bar chart support at $13.62.
WHEAT: December SRW futures continue to struggle against $7.50 resistance with price falling sharply in the overnight session. Bulls want to defend support at $7.03 which is quickly backed by the psychological $7.00 level. Bulls are targeting resistance of $7.40, then Thursday’s spike high of $7.68 3/4.
CATTLE: Choppy/higher
HOGS: Choppy/higher
CATTLE: Live cattle futures are expected to open with a mostly firmer tone following yesterday’s all-time high. Cash trade has been largely pushed to the end of the week, but early trading indicates a jump higher from last week’s average. The discount in futures from cash prices will continue to provide solid support amidst any price pullback. Futures may face profit-taking ahead of the Cattle on Feed and Cattle Inventory Reports this afternoon following the close and may provide some additional volatility, extending the recent norm of choppy but generally higher trading.
HOGS: Lean hog futures are expected to open firmer following this week’s technical breakout in the futures market. There remains a steep discount to the cash index, which should provide solid support for futures, though the cash index rose the smallest amount since June 1 on Wednesday. Thursday’s wholesale strength ought to provide a continued boost to prices as well, further extending this year’s delayed seasonal rally.
