GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: Winter wheat 1 cent lower to 1 cent higher; HRS 3 to 5 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat are consolidating in recent ranges, not far off for-the-move lows. Bulls need to follow-through on recent strength to negate bearish consolidation patterns on the daily bar chart. Today’s WASDE could be the catalyst needed to break out of the ongoing range. Front-month crude oil futures are modestly higher this morning while the U.S. dollar index is up around 150 points, trading above the $100-mark.
Producer price inflation (PPI) rose by 1.1% month-over-month in May, the same as the 1.1% increase in April, but well above forecasts of 0.7%. Prices of good soared 2.8%, largely due to a surge in gasoline prices. Year-over-year, PPI rose 6.5%, the most since November 2022 and above forecasts of 6.4%. Core PPI, which removes food and energy prices, rose 0.4% month-over-month, while the year-over-year figure rose 4.9%, both of which were below expectations. Inflation surging further challenges the Fed in its battle with inflation, leaving rate hike a likely outcome.
The U.S. launched strikes against multiple targets in Iran for the second straight day after President Trump accused Tehran of dragging out talks on an interim peace deal. U.S. Central Command said it had begun “additional self-defense strikes” at 5:15 p.m. New York time on Wednesday, targeting surveillance systems, air defense sites and communications networks. Trump said in a Fox News interview that he had spoken with top Iranian officials Wednesday and they had asked him to halt the bombing, but he added the U.S. would hit Iran again if its leaders didn’t sign an agreement. At the same time, a growing number of oil tankers are moving through Hormuz, boosting the flow from a trickle to a stream. Those offsets have helped bring oil prices down by more than a quarter since the war began, even though a lasting peace deal has remained elusive.
USDA will release its June World Agricultural Supply and Demand Estimates (WASDE) report today at 11 a.m. CDT. No significant changes are expected to the grains’ balance sheets. U.S. export data for wheat indicates shipments slowed in the final month of the marketing year, encouraging analysts to lift their ending stock forecasts for old crop. USDA could lower the soybean export estimate as well due to relatively weak shipments and sales. Corn exports are unlikely to see much change. USDA was aggressive in cutting U.S. wheat production in the May report. Analysis of conditions paired with production suggests a modest decline in today’s report. USDA cotton data today, including U.S. production, is also expected to show no big changes from the May S&D report. Click here for the full story.
CORN: July corn futures continue to trade in an apparent bear-flag on the daily bar chart. Support lies at Monday’s contract low of $4.12 1/2. Resistance stands at $4.20 then yesterday’s high of $4.25 3/4.
SOYBEANS: July soybean futures are trading in the upper end of yesterday’s range. Resistance stands at yesterday’s high of $11.29 3/4 on a turn higher. Support comes in at Tuesday’s for-the-move low close at $11.13 3/4.
WHEAT: July SRW wheat continues to trade in a tight range. Bulls are looking to negate the recent bear-flag on the daily bar chart buy closing prices above key resistance at $5.93 3/4. Additional strength eyes the $6.00 mark. Support comes in at $5.80 on persistent selling.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Cattle futures are expected to open with a mostly weaker tone, driven by technical selling. The 40-day moving average remains stiff resistance at $241.50, capping most of the gains in August fats on Friday. Cash trade so far this week has averaged just below last week’s average. Choice beef rose 38 cents to $393.28 Wednesday. Bulls are looking to overcome downtrend resistance today, but given recent headline-sensitive trade, that could be a tall order.
HOGS: Hog futures are expected to open with a mostly firmer tone in a continuation of yesterday’s strength. Prices rose on corrective buying on Wednesday, which could hold true again today. The CME lean hog index is up another 16 cents to $92.92 as of June 9, extending the recent uptick. Pork cutout ended Wednesday flat after gains in loins and bellies were offset but losses in picnics and hams.