Ahead of the Open
Corn: 12 to 17 cents lower.
Soybeans: 16 to 25 cents lower.
Wheat: 5 to 9 cents lower.
Grain and soybean futures are expected to open sharply lower after rains fell across much of the Midwest over the weekend, aiding dryness-stressed crops. In other markets, the U.S. dollar index is down on a corrective pullback after solid gains posted last week, while Nymex crude oil futures were little-changed at around $71.57 a barrel.
Rains favored the southern half of Iowa over the weekend, with accumulation fading to the north where rains are most needed. Light rain also fell in North Dakota and into northern Minnesota, with better rains across much of the eastern Corn Belt. Accumulation ranged from 0.20 inch to 0.75 inch, according to World Weather. All of U.S. grain and oilseed areas in the Midwest, Delta and southeastern states will receive additional rain over the coming week to 10 days, World Weather said, with cooler temperatures to start the week. Rain will continue to fall in many areas in the U.S. key crop areas, with the exception of the far northwest part of the Corn Belt, World Weather said in a report today.
USDA reported daily new-crop soybean sales of 336,000 MT to China and 120,000 MT to unknown destinations.
China imported 9.23 million metric tons (MMT) of soybeans from Brazil during May, an 82% surge from April and a 4% (370,000-MT) rise from year-ago levels, according to data from the country’s General Administration of Customs.
Indonesia will soon announce plans to lower its highest duty on palm oil exports to $175 per metric ton, which would be an $80 decline from its current top-end rate, according to Finance Minister Sri Mulyani Indrawati.
Futures’ sharp bounce-back to end last week may be short-lived with Midwest crop conditions expected to improve following weekend rains. Traders await USDA’s next weekly crop condition ratings this afternoon. USDA rated 68% of the U.S. corn crop “good” to “excellent,” as of June 13. Chart levels to watch include December futures’ low last week at $5.30 1/2.
Futures may extend last week’s limit losses if Midwest rainfall boosts crops as many expect, though the daily soybean sales may help limit some of the selling pressure. In last week’s report, USDA rated 62% of U.S. soybean acres in “good” or “excellent” condition as of June 13, down from 67% the previous week. Chart level to watch include last week’s low in November soybeans at $12.40 1/2.
Traders will continue to monitor winter wheat harvest progress in Central and Southern Plains and ongoing heat and dryness in the Northern Plains. SRW futures may face continued pressure, with the $6 level a possibility, unless export demand improves or the U.S. harvest proves disappointing. Declines last week weren’t as severe for spring wheat futures compared to winter wheat amid ongoing concerns over heat and dryness in the Northern Plains and deteriorating USDA crop condition ratings.
CATTLE: Futures’ direction this week will in part hinge on the question of whether recent cash market strength will be sustained. Live steers in top U.S. cattle states averaged $122.85 Friday, up from $120.02 a week earlier, according to USDA. Boxed beef prices remained under pressure with retailers having wrapped up most buying for the July 4 holiday. Choice cutout values averaged $323.28 Friday, down from $337.56 a week earlier.
Traders await the USDA’s Cattle on Feed Report on Friday.
Chart levels to watch include August futures’ contract high of $125.775, reached June 16, and last week low of $120.
HOGS: Futures may be due for recovery after dropping sharply to seven-week lows at the end of last week, and hog supplies typically fall to their lowest levels of the year in late June and early July, which could support cash hog and wholesale pork markets. National direct carcasses on Friday averaged $122.62, up from $119.26 a week earlier, according to USDA. Pork cutout values averaged $120.65, down from $132.54 a week earlier. Hog slaughter last week, at 2.443 million head, was up 3,000 from the previous week.
USDA’s next Quarterly Hogs & Pigs Report Thursday will offer insight into pork supplies in the second half of 2021 and beyond.
Chart levels to watch include $107.875, July futures’ intraday low for May, and a gap between the June 16 low of $115.50 and June 17 high of $114.30.