GRAIN CALLS
Corn: 12 to 17 cents higher.
Soybeans: 37 to 48 cents higher.
Wheat: 9 to 15 cents higher.
GENERAL COMMENTS:
Grain and soybean futures are expected to open sharply higher amid lingering concerns over Midwest dryness and markets due for a technical rebound after steep, fund-driven losses in recent days. In other markets, U.S. dollar index climbed to two-month high overnight, while Nymex crude oil futures fell about 1%, to under $71 a barrel.
Weather forecasts continue to call for rainfall and cooler temperatures across much of the Midwest into the early part of next week, though amounts are expected to be light in western and northern areas. Expected rainfall was increased from northern Illinois through Ohio June 25-27, based on last night’s GFS model, according to World Weather Inc., but the forecast was “much drier in a large portion of the Corn Belt” June 27-29.
Warm, dry conditions continued in northern and western areas of the Midwest the week ended June 15, resulting in the “widespread worsening of drought and dryness,” according to Thursday’s U.S. Drought Monitor. Iowa, the top U.S. corn producer, saw a 19-point jump in areas considered under “moderate” or “severe” drought, with 76% of the state now impacted by these conditions. “Many crops are struggling due to the ongoing severe and extreme drought,” the report said.
The National Weather Service (NWS) is calling for above-normal temperatures over most of the country during the July through September period. The exception is a bubble from extreme southern Iowa to the Gulf of Mexico, for which NWS predicts “equal chances” for normal, above- and below-normal temperatures.
CORN:
Limits for corn futures expand to 60 cents today after the July contract closed down the 40-cent limit at $6.33 yesterday. December also closed limit-down, at $5.32 1/2, a three-week low. December futures rose as high as $5.53 overnight but remain down from $6.09 3/4 at the end of last week.
SOYBEANS:
The daily price limit for soybean futures remains expanded at $1.50, along with expanded limits of $45 for soymeal and 550 points for soyoil. November soybeans rose as high as $13.11 overnight but remain down from $14.38 3/4 at the end of last week.
WHEAT:
Traders will continue to monitor winter wheat harvest progress in Central and Southern Plains and ongoing heat and dryness in the Northern Plains. Expected rains were increased in the southwestern part of the Northern Plains for June 27-29, according to World Weather. Rainfall was decreased in week 2 in the southeastern part of the Northern Plains.
CATTLE: Steady-firmer
HOGS: Steady-firmer
CATTLE:
Livestock futures may be due for a bounce-back after sharp losses in recent days, though continued weakness in boxed beef prices may limit any upside as retailer buying for July Fourth winds down. Cash cattle action this week has generally ranged from $122 on the Southern Plains to $124 in the Midwest. Live steers averaged $122.83 per hundredweight in top cattle regions yesterday, up from last week’s average of $120.03, according to USDA. Choice cutout values yesterday averaged $326.25, down $2.92 from Wednesday and the sixth consecutive daily decline.
HOGS:
Hog futures will trade with expanded price limits of $4.50 today. July futures yesterday dropped to $111.00 per hundredweight, down from $119.98 at the end of last week and the lowest settlement in a month. Chart levels to watch include $107.88, the intraday low for May.
National direct carcasses yesterday averaged $122.28, up $6.17 from Wednesday and up from $119.26 at the end of last week. Pork cutout values averaged $124.83, up $4.31 for the day and the first increase in a week. Much of the cutout gain was driven by pork bellies, which surged nearly $35, to $185.80. Hog slaughter so far this week, at 1.913 million head, was down about 0.9% from the same period last week.