GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: 1 to 3 cents lower.
GENERAL COMMENTS: Corn futures pulled back from Monday’s corrective gains overnight, while soybeans and wheat extended losses. Favorable weather and trade uncertainties continue to limit buyer interest. The U.S. dollar index and crude oil futures are both tethered near unchanged.
The Midwest, Northern Plains, Delta and Southeast should continue to experience favorable conditions for developing corn and soybean crops over at least the next 10 days, according to World Weather Inc. Net drying and a warmer bias is expected from the Southern Plains through the central Delta and southern Tennessee River Basin. While no major crop stress is expected, it will increase needs in these areas for rains in late July/early August. Dry and warm weather will prevail in the Pacific Northwest.
Weather conditions through the first half of July have been “nearly ideal” and the corn crop is “on its way to a record yield.” Therefore, crop consultant Dr. Michael Cordonnier raised his corn yield 2 bu. to 182 bu. per acre, increasing his corn production forecast to 15.79 billion bushels. While soybean conditions aren’t quite as high and key August weather lies ahead, Cordonnier raised his soybean yield 1 bu. to 52.5 bu. per acre, increasing his production forecast to 4.33 billion bushels.
USDA rated the corn crop as 74% “good” to “excellent” and 5% “poor” to “very poor,” the soybean crop 70% “good” to “excellent” and 5% “poor” to “very poor” and the spring wheat crop 54% “good” to “excellent” and 13% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop improved 1.4 points to 383.4, now 10 points above last year at this time. The soybean crop improved 3.5 points to 367.2 and is now 3.0 points above year-ago. The spring wheat rating increased 6.2 points to 357.7, though that’s still 26.3 points below year-ago. Click here for details.
The National Oilseed Processors Association (NOPA) is expected to report its members crushed 185.2 million bu. of soybeans in June, according to a Reuters survey. That would be down 4% from May and the smallest figure in four months, but up 5.5% from last year and a record for the month. Soyoil stocks held by NOPA members as of June 30 were projected at 1.374 billion pounds.
U.S. consumer inflation increased 2.7% from year-ago during June, the highest level since February. Core inflation, minus food an energy costs, increased 2.9% annually. Markets continued to reflect roughly 60% odds the Fed will cut interest rates in September.
CORN: December corn futures closed above the 5-day moving average for the first time since July 3 on Monday, but slipped below that level overnight, keeping bears firmly in control. Contract-low support lies at $4.07 1/2, which is followed by the psychological $4.00 mark. Resistance is heavily layered in the $4.20 1/2 to $4.36 1/4 range where the 10-, 20-, 40- and 50-day moving averages stand.
SOYBEANS: November soybean futures posted an inside day down during the overnight session. Monday’s low of $9.98 1/4 stands as near-term support. Below that, support would be at $9.96 and then there wouldn’t be a strong level until the April low at $9.71 1/4. Resistance is in the $10.11 to $10.22 area.
WHEAT: December SRW futures are leaning on support of $5.56 3/4 at the bottom of the two-month sideways range. Violation of that level would open downside risk to the contract low at $5.43 3/4. Resistance is heavily layered in the $5.60 to $5.90 range.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle and feeders are expected to open mostly lower on followthrough from Monday’s sharp losses and poor close. But steep discounts to the cash market may limit seller interest after the open. Cash cattle averaged $237.21 last week, up $7.78 from the previous week and the second highest price on record. Despite the cash surge, August live cattle extended their discount to nearly $18.00 on Monday. Wholesale beef prices fell $1.57 to $377.07 for Choice and $1.91 to $364.58 for Select on Monday. Packer margins are now solidly in the red again after a brief period in positive territory.
HOGS: Lean hog futures are expected to face followthrough selling from Monday’s sharp losses and poor close, though discounts to the cash index could limit seller interest. The CME lean hog index is up 15 cents to $107.25 as of July 11. July lean hog futures, which expire at noon CT today and are settled against the cash index on July 17, finished Monday at a 55-cent discount to today’s cash quote. August hogs finished Monday at a $4.025 discount. Pork cutout firmed 38 cents to $113.85 on Monday, led by a $5.40 rise in primal bellies.