Ahead of the Open | July 7, 2023
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 4 to 8 cents lower.
Wheat: 10 to 15 cents lower.
GENERAL COMMENTS: Wheat futures led an overnight price decline in the grain and soy markets. Followthrough selling is expected during daytime trade. Outside markets are price-supportive for grains with the U.S. dollar index down around 350 points and crude oil modestly firmer, though weather and money flow will mean much more to today’s price action.
Forecasts continue to call for favorable conditions across the Corn Belt during the next week to 10 days. Multiple waves of rain will move across the region, favoring central and southern areas. But World Weather Inc. says northern areas, where rains will be lighter and more sporadic, will receive some moisture relief, though net drying is likely.
USDA reported daily corn sales of 180,000 MT to Mexico – 45,000 MT for 2022-23 and 135,000 MT for 2023-24.
Export sales for the week ended June 29:
Corn: Net sales of 251,700 MT for 2022-23, up 79% from the previous week and 62% above the four-week average. Net sales of 418,000 MT for 2023-24. Traders expected sales of 0 to 500,000 MT for both 2022-23 and 2023-24.
Soybeans: Net sales of 187,800 MT for 2022-23, down 17% from the previous week and 45% below the four-week average. Net sales of 592,800 MT for 2023-24. Traders expected sales of 100,000 to 350,000 MT for 2022-23 and 0 to 400,000 MT for 2023-24
Wheat: Net sales of 405,800 metric tons (MT) for 2023-24, which topped expectations ranging from 50,000 to 350,000 MT.
The U.S. economy added 209,000 non-farm payrolls in June, which was slightly less than the 225,000 increase economists expected and down from 306,000 in May. The unemployment rate ticked down to 3.6%. Average hourly earnings increased 0.4% in June and 4.4% over the past year. Fed fund futures now reflect 89% odds of a 25-basis-point interest rate hike later this month, though reduced chances of further increases later this year.
CORN: December corn futures continue to consolidate around the recent lows. Near-term support is this week’s low at $4.85 1/2. Near-term resistance is in the $5.20 to $5.30 range.
SOYBEANS: November soybean futures are signaling Monday’s spike high marked a short-term top. Near-term support is at $13.25 1/2. Bulls must reestablish $13.38 3/4 as support to signal the pullback was nothing more than a correction.
WHEAT: December SRW futures are weakening technically Bulls must defend support at this week’s low of $6.57 1/4 to avoid the contract moving the next leg lower. Near-term resistance is in the $6.90 to $7.00 range.
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly weaker tone on followthrough selling. But after three days of corrective declines, buyers could surface under the market, especially if early seller interest is limited. Cash cattle trade got underway around $178 in the Southern Plains on Thursday, steady to $2 lower than the bulk of trade in that region last week. Feedlots in the northern market where supplies are tighter resisted the weaker prices. Futures are trading well below the cash market. Wholesale beef prices fell $2.91 for Choice and $2.72 for Select on Thursday, though movement improved to 126 loads. USDA reported net beef sales of 17,000 MT for 2023, up 41% from the previous week and 33% above the four-week average.
HOGS: Lean hog futures are expected to open mostly lower on corrective selling, though seller interest should be limited by the firming cash market. The CME lean hog index jumped $1.39 to $96.07 (as of July 5). After Thursday’s losses, July hog held a $3.98 premium, while August hogs finished $1.055 above the cash index. The pork cutout value dropped $3.69 to $105.00 on Thursday. USDA reported net pork sales of 26,000 MT for 2023, down 3% from both the previous week and the four-week average.
