GRAIN CALLS
Corn: 8 to 14 cents lower.
Soybeans: 21 to 24 cents lower.
Wheat: 3 to 14 cents lower.
GENERAL COMMENTS:
Corn, soybean and wheat futures are expected to open broadly lower as favorable Midwest weather improves the crop outlook. The U.S. dollar index is mildly weaker.
The Midwest weather outlook over the next week has changed little, with rain and cooler temperatures expected for much of the region. A recent GFS model run increased rainfall in southwestern and central Missouri Saturday into Monday, with amounts of 1.5 to 4 inches expected, and also boosted rainfall from Missouri through southern Michigan and northwestern Ohio Monday into next Wednesday, now projecting 0.75 to 2 inches.
Data from Argentina’s ag ministry earlier this week showed the country processed 4.29 million metric tons (MMT) of soybeans during May, which was in line with expectations, a 2% gain from April and a 7% jump from year-ago. Harvest is underway, but Argentine farmers are once again slow to sell beans, holding onto the oilseed as a hedge against inflation. For the first five months of 2021, 17.99 MMT of soybeans have been processed, up 17% from last year at this point.
The European Commission trimmed its common wheat usable production forecast from 126.2 MMT to 125.8 MMT, but it made no change to its 2021-22 export forecast of 30 MMT. That would be a 7% rise from last year’s 117.2 MMT crop, when exports totaled 27 MMT.
CORN:
Today’s USDA weekly export sales report showed U.S. corn net sales of 216,300 metric tons for 2020-21, up from the previous week but down 33% from the prior four-week average. For 2021-22, net sales of 310,800 MT were primarily for unknown destinations. Traders expected old-crop sales of zero to 400,000 MT and new-crop sales of 200,000 MT to 525,000 MT. In futures, chart levels to watch include December futures’ May low at $5.00 1/4.
SOYBEANS:
Net soybean export sales of 141,700 MT for 2020-21 were up from the previous week and from the prior four-week average. For 2021-22, net sales totaled 47,300 MT. Traders expected old-crop sales of negative 100,000 to 175,000 MT and new-crop sales of 200,000-500,000 MT. USDA reported daily soybean sales of 132,000 MT to China and 260,000 MT to unknown destinations – both for 2021-22. In futures, chart levels to watch include last week’s low in November soybeans at $12.40 1/2.
WHEAT:
Net wheat export sales of 374,100 metric tons for delivery in 2021-22 included increases for unknown destinations (110,600 MT) and Mexico (94,500 MT). Traders expected sales of 200,000 MT to 800,000 MT. Ongoing concerns about heat and dryness stressing spring wheat in the Northern Plains may limit selling in that market. Overnight, September spring wheat futures rose to $8.07, the highest intraday price since the contract high of $8.45 3/4 on June 7, but retreated from that level.
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE:
Futures may continue to gain support the cash cattle market, even as beef prices slip. There was some additional cash cattle trade from $125 to $126 in Iowa and Nebraska yesterday, with Texas seeing a few sales at $122. Tomorrow, USDA is expected to report a 0.5% rise in the number of cattle on feed as of June 1. Boxed beef prices continued to slump amid slower retail demand, with Choice cutout values averaging $312.05 yesterday, down $3.70 from the day before and the lowest since May 10.
Market bulls retain the near-term technical advantage in cattle futures, with upside price objectives including closing above August live cattle’s contract high of $125.775, reached June 16. Downside levels to watch include last week’s low at $120.00 and solid technical support at $117.50.
HOGS:
Hog futures will trade with expanded $4.50 limit after the limit-down closes yesterday. July lean hog futures settled $3 limit lower and left a gap to the downside on the daily chart yesterday. The market awaits today’s USDA Quarterly Hogs & Pigs Report this afternoon, which is expected to show a 2.3% year-over-year dip in the U.S. hog herd as of June 1. July lean hogs remain at a double-digit discount to the CME lean hog index, with expiration just two weeks away. National direct carcasses yesterday averaged $122.78, down $5.26 from the previous day, according to USDA. Pork cutout values averaged $107.82, down 1 cent from the day before.