GRAIN CALLS
Corn: 12 to 14 cents higher.
Soybeans: 32 to 26 cents higher.
Wheat: 8 to 11 cents higher.
GENERAL COMMENTS: Corn and soybeans led the way higher overnight with wheat following higher. Weather and reports of beneficial trade talks with China spurred gains. The price gains bolstered bulls’ advantage on the daily bar chart, but some profit-taking is possible from recent highs. Front-month crude oil futures are trading modestly lower this morning while the U.S. dollar index is up around 270 points.
An intense heatwave continues in France, one of the European Union’s largest corn producers. The FranceAgriMer agency reported deteriorating crop conditions after preliminary estimates indicated extreme heat may have damaged nearly one-third of the country’s corn crop. Meantime, World Weather Inc. said in a Sunday evening dispatch that while U.S. rainfall during the holiday weekend was heavy to excessive from central through eastern Iowa, southwestern Wisconsin and northern Illinois, soil moisture as of Sunday was showing signs of drying down in the lower Midwest as well as the central and northeastern Plains. Rain this week “will be restricted in quite a few areas, resulting in additional drying, especially with temperatures staying warm. Rainfall next week may be most limited in the southwestern corn and soybean belt, although there may be some lighter-than-usual rain in the northwest part of the region as well,” said the forecaster.
A China Daily article noted the U.S. and China have set guiding objective for expanding two-way agricultural trade this morning. The parties have agreed to include ag products under a reciprocal tariff reduction agreement, according to the Chinese Ministry of Commerce. That likely contributed to the rally seen in corn and soybeans overnight.
Major OPEC+ members agreed in a video conference Sunday to add 188,000 barrels a day to their output target for next month. The increase is part of the group’s plan to finish reversing output curbs made a few years ago and means they’ve added 940,000 barrels a day to quotas since the war began. OPEC and its partners could soon face a choice between restraining output or fighting over market share — a potential price war — as some forecasters predict the re-emergence of a global crude oil glut. ”The dramatic switch from famine to feast means that worries of an oil-led inflation spike are all but vanquished, and major oil producers may soon face questions about whether they are ready to curb supply to prop up prices,” said a Bloomberg report. “Analysts have warned that the market is at risk of a glut heading into next year, with the physical oil market flashing signs of weakness and suppliers struggling to find buyers for their oil.”
CORN: December corn futures surged to a for-the-move high overnight. Bulls are eyeing resistance at $4.56 3/4, the 40-day moving average, on a push higher. Support stands at $4.50 then the 20-day moving average at $4.46 1/2 on profit-taking.
SOYBEANS: November soybean futures surged higher overnight. Bulls next objective is breaking prices above $11.90, which is reinforced by the psychological $12.00 mark. Support comes in at $11.75 then $11.67 1/4 on a turn lower.
WHEAT: September SRW wheat are trading solidly higher. Stiff resistance remains over the market at $6.12, the converged 40-day and 100-day moving averages. Support comes in at $6.03 3/4 then $6.00 on a turn lower.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Cattle futures are expected to open with a mostly firmer tone, supported by technical support. The 100-day moving average capped the downside on Thursday and remains stiff support under the market. Bulls are looking to maintain that mark today. Cash trade likely dipped again last week, which has weighed on futures. The drop in choice beef, which slid $4.19 to $387.07 Thursday, has weighed on futures as well.
HOGS: Hog futures are expected to open with a mostly firmer tone in a continuation of Thursday’s strength. Some resistance persists at the 40-day moving average, which capped strength last week, which could limit gains after the open. The CME lean hog index is up another 18 cents to $91.67 as of July 1, extending the recent string of gains. Pork cutout rose 35 cents to $96.06 Thursday, led by gains in picnics and bellies.