Corn: 1 to 3 cents higher
Soybeans: steady to 3 cents higher
Wheat: 5 to 8 cents higher
Corn futures slipped initially overnight and have recovered this morning on renewed concerns about warmer, drier weather chipping away at historically high U.S. crop ratings this month. Weather models vary wildly on expected rainfall over the next 10 days. The favored European model offers little rain for the Central Plains and much of the Corn Belt through the middle of the month. Most forecasts agree that above-normal temperatures are in the offering into the second half of June. There was a small increase in Asian corn buying overnight, albeit optional origin.
In the soybean market, prices seen following rebounds in grain markets after steep losses on Monday. On Monday, USDA delivered an initial 75% “good” to “excellent” rating for the U.S. soybean crop, which tied 2010 as the highest initial rating on record. Still, crop conditions in June have little correlation to final yields so bears will be reluctant to press on the downside with current warm, dry outlooks.
The wheat market may find some support from drier forecasts for Russia and Ukraine the next 10 days and building dryness in China and Australia, offsetting beneficial rains recently across the U.S. northern Great Plains and Canadian Prairies. U.S. winter wheat crop rating slipped in the week ended June 3, USDA said in a report Monday. U.S. winter wheat harvest is 5% complete and another blast of heat this week may curb yield potential while boosting protein content. The world needs protein wheat supplies and firmer cash basis levels heading into harvest may be a sign of improving demand for high-quality wheat supplies.
Cattle: Steady to higher
Hogs: Mostly lower to start
Cattle futures should open steady to a little higher as beef prices Monday were steady to firmer after a large kill last weeks. Packers enjoy large margins and may be willing to start bidding a little more to acquire inventory as market weights have slipped lower the last two weeks, indicating more current marketings. Futures closed near session lows which will keep the market defensive on an early rally.
Mexico officially announced 20% tariffs on U.S. pork leg and shoulder imports in retaliation to Trump Administration imposition of steel and aluminum tariffs last week. Rising trade tensions complicate renegotiating NAFTA trade agreement. Mexico imported almost 650,000 MT of pork legs and shoulders. Look for some buying interest at lower values after wholesale U.S. pork prices rose 84 cents and the CME cash index rose to the highest since February on Monday.