Corn: Up 1-3 cents
Wheat: Up 4 to 8 cents
Corn setting up for more upside consolidation today—the start of summer with longest daylight hours of the year. Corn ended little changed yesterday after falling to new contract lows a day earlier. It is raining across the Midwest again this morning leading to trade chatter that this year’s crop is already weather-proof. However, reports of too much rain in some areas and warm to hot forecasts beginning late next week signals time to be careful with that kind of speculation ahead of pollination. Demand continues to show improvement. The EPA will propose reallocating biofuel blending obligations from small refinery exemptions as early as Friday. Weekly ethanol production up last week and inventories fell.
Soybeans seen trying to follow corn and wheat higher, but rallies restrained after China news service warned the government could strike back on U.S. companies as trade tensions rise. Commerce Secretary Wilbur Ross acknowledged during a Senate hearing Wednesday that that China will likely continue to reduce its use of U.S. soybeans, but farmers will sell their crops somewhere, at a discount. Weather remains wet with moderate temperature for the Midwest during the next week before hotter, drier pattern emerges.
Wheat market called higher on shrinking global crops. Russia wheat harvest may fall almost 22% from a year ago to 67.4 million metric tons, below USDA’s forecast for 68.5 million, according to a French consultancy today. Adverse weather in China may cut production more than official government forecast, boosting import demand for mostly non-U.S. supplies. When the biggest global producer and consumer has a crop problem, it magnifies the losses in other exporting nations. Drier weather from the Plains to the Midwest develops later this week after recent rains and should allow for harvesting to ramp up. Still, cash buyers are offering some of the best basis bids in several years at harvest, a sign of underlying demand for the reduced U.S. crop.
Cattle: Steady to lower
Hogs: Steady to lower
Cattle futures seen defensive after yesterday’s rally in August cattle to near 3-month highs failed to hold into the close. Wholesale Choice and Select carcass values fell Wednesday amid heavy supply offerings. The good news was sales picked up at the lower prices.
Hogs should open a little lower in followthrough selling to the sharp futures drop yesterday on export trade worries and weakness in cash pigs. Wholesale pork prices inched higher on strength in bellies and rib cuts, but the weakness in loins is a negative development and likely adds to worries the cash hog market has seen its season peak.