GRAIN CALLS
Corn: 3 to 6 cents higher.
Soybeans: 8 to 12 cents higher.
Wheat: Winter wheat 8 to 12 cents higher; spring wheat 2 to 4 cents higher.
GENERAL COMMENTS: Corn and soybeans extended this week’s corrective gains overnight, pulling wheat futures higher. Support came from a hotter weather forecast and hopes of improved demand. U.S. dollar index is nearly 500 points lower and front-month crude oil futures are around $1.00 higher, which will add some outside market support.
Changes are coming to the weather pattern that will produce hotter temps and high relative humidity across areas of the U.S. through next week, inducing some crop stress. World Weather Inc. says hot temperatures are likely in the Central and Southern Plains, Delta, lower Midwest and interior southeastern states from this weekend through the end of next week, with heat indices of 95 to 115 likely. A westward shift in the heat and dryness is likely in the last days of July, allowing some cooling and rainfall back into the lower Midwest and southeastern states. Northern and eastern Midwest crop areas will be sufficiently moist to carry on normal crop development during the next two weeks.
Indonesia and the U.S. are still negotiating the specifics of a bilateral trade agreement, despite both sides confirming a deal has been reached in principle. According to Susiwijono Moegiarso, a senior official at Indonesia’s economic ministry, talks are ongoing over potential exemptions from the 19% U.S. tariffs on Indonesian goods such as cocoa, rubber, crude palm oil, coffee and nickel. In return, Indonesia has agreed to exempt U.S. tech products from local content rules. However, the treatment of U.S. exports to Indonesia remains partly unclear. Susiwijono noted that alcoholic beverages and pork would no longer benefit from a zero-tariff status, though he did not specify what new tariff levels would apply. Some U.S. goods will also be exempt from Indonesia’s import quota rules, though specific products and quota levels were not disclosed. One emerging detail is that U.S. cotton shipped to Indonesia may face a quota but would remain tariff-free. A key aspect of the agreement entails Indonesia’s commitment to boost its annual purchases of U.S. wheat. No timeline has been provided for finalizing full terms of the agreement.
CORN: December corn futures extended the rebound off Monday’s contract low during overnight trade, surging above the 20-day moving average for the first time since July 3. Near-term resistance is the July 7 gap from $4.29 3/4 to $4.32 3/4. The 10-day average near $4.19 is near-term support.
SOYBEANS: November soybean futures surged above the 20-, 40-, 50-, 100- and 200-day moving averages and moved into the July 7 chart gap during overnight trade. The top of that gap at $10.44 1/4 is initial resistance, followed by the July 3 high at $10.58 1/2.
WHEAT: December SRW futures continue to pivot around $5.60, pushing above that level and the 5-day moving average overnight. Initial resistance stands at the 10-day moving average at $5.64 1/2 and then the 20-day average near $5.70.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle and feeders are expected to open with a firmer tone on support from cash fundamentals and big discounts futures hold to the cash market. Cash cattle lightly traded in both the Southern Plains and northern market at higher prices on Thursday, though many packers were reluctant to actively bid for cattle given negative margins. Wholesale beef prices were mixed with Choice up 43 cents to $373.28 and Select down $4.07 to $353.84. Beef movement was 139 loads on Thursday and has averaged 135 loads the past five days.
HOGS: Lean hog futures are expected to open higher in an extension of gains the past three days. Cash hog fundamentals are picking up steam. The CME lean hog index is up 43 cents to $107.63 as of July 16, marking the first back-to-back rise and the biggest daily gain since late June. Pork cutout firmed $1.58 to $116.32 on Thursday, the highest level in three weeks.