Ahead of the Open: Wheat Up on Global Crop Concerns; Corn, Soy Steady-Mixed

Posted on 06/06/2018 7:39 AM

Crop calls

Corn: Steady to 1 cent higher
Soybeans: Mixed

Wheat: 4 to 7 cents higher

 

Corn should be choppy today after finding some underlying demand Tuesday. Excellent current crop conditions are battling with some forecasts for hotter, drier weather into the summer. Forecast models have been unpredictable for the past several weeks increasing market focus on actual rainfall amounts and coverage the next several weeks. President Trump dismissed proposals for changes in the RFS program, a win for farm-state senators and ethanol industry. Market will watch weekly ethanol production and stocks data later today for confirmation of continued strong demand with improving blender margins.

 

Soybean market direction also hinges on divergent weather forecasts. It will be warm the next few weeks and the question is how much rain develops to ease developing dryness in some areas. Trade tensions also get a mixed view. USDA Secretary Perdue described the U.S./China talks as ``challenging” with negotiations going on behind the scenes.

 

Wheat futures leading CBOT rebound today. Worries about smaller global crops increasing with limited rain forecast in southern Russia, eastern Ukraine and Argentina. Too much rain is raising concerns about crops in China and France.  Harvest in the southern Great Plains slowly moving north with yields mixed relative to expectations and lower than a year earlier. Drop in USDA  winter crop ratings this week fighting generally good conditions across U.S. and Canadian spring wheat regions.  USDA out with new production forecasts on June 12
 

Livestock calls                                                                      

Cattle: Choppy to higher
Hogs:  Slighty higher to start

 

Cattle traders will be waiting for signals from the cash market with trading at a standstill in all major feeding regions to start this week. Last week in the Southern Plains live trades moved at $110 Choice wholesale beef was steady Tuesday with small losses for select beef values. Still, packer margins remain near record highs and they have room to bid a little more for live inventories. Slaughter this week is equal to a year earlier.

Hog futures may rise on improving cash market fundamentals. Pork prices rose on Tuesday to give a boost to the cash markets. Slaughter is up 11,000 to 893,000 this week from a year earlier. Futures fell yesterday on new Mexican import tariffs on pork, but closed near the daily highs, a positive technical sign to start trading today.  

 

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