GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 6 to 8 cents higher.
Wheat: SRW 1 to 3 cents higher; HRW 2 to 4 cents lower; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Markets bounced overnight amidst concerns over the ceasefire in Iran. Gains in grains seem corrective at this juncture as each has sustained significant chart damage over the past week. Front-month crude oil futures are higher this morning while the U.S. dollar index is down around 50 points.
U.S. personal consumption expenditures (PCE) rose 0.5% month-over-month in April, slowing from a 1.0% gain in March. Spending on goods led PCE higher as energy prices continue to rise. PCE rose 3.8% year-over-year, the highest since May 2023. Core PCE, the Federal Reserves preferred inflation gauge, rose 0.2% month-over-month, down from 0.3% in March. Year-over-year, core PCE rose 3.3%, up from 3.2% in March.
The U.S. struck Iranian military targets for the second time this week and Kuwait said it responded to missile and drone threats, highlighting the fragility of the ceasefire. U.S. forces shot down Iranian drones fired at a commercial ship and hit a launch unit near the Strait of Hormuz, according to a U.S. official, who said the attacks were defensive and the ceasefire remains intact. President Trump asserted that no one nation would control Hormuz, which has emerged as one of the key obstacles in resolving the conflict, and said the strait’s going to be open to everybody.
“Australia’s red meat industry expects strong beef demand in the U.S. and Southeast Asia will largely offset the impact of a new 55% tariff by major customer China, which could come into effect as soon as mid-June, Bloomberg reports. The Chinese government announced a new quota system for beef imports targeting major international producers including Australia and Brazil in late December, saying the policy would protect domestic farmers and producers. “Beijing warned in May that Australia was currently sitting at 80% of its annual quota of 205,000 tons of beef shipments, after which the 55% trade impost will come into effect. Analysts and industry figures contacted by Bloomberg said they expect Australian exports to hit the limit as early as mid-June at the current pace,” said the report.
CORN: July corn futures rose on corrective buying overnight. Bulls are eyeing resistance at $4.60 3/4 on persistent strength. Support comes in at the overnight low of $4.51 1/2 on a turn lower.
SOYBEANS: July soybean futures are trading near bundled resistance at $11.95. Additional strength has bulls eyeing resistance at $12.00. Support comes in at $11.85 1/4 on a turn lower.
WHEAT: July SRW wheat bounced overnight. Resistance stands at the 40-day moving average at $6.29 1/2, which is reinforced by resistance at $6.40. Support lies at the overnight low of $6.18 on a turn lower.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Cattle futures are expected to open higher in a continuation of recent strength. Bulls defended key support at the 40-day moving average, a benchmark that has limited the downside since mid-March. Cash trade has been slow to develop this week. The bounce in futures could support feedlots advantage, but last week’s dip in cash prices could entice further weakness. Choice beef continues to work higher, rising another $1.82 to $394.72 Wednesday.
HOGS: Hog futures are expected to open with a firmer tone in a continuation of recent strength. Gains on Wednesday stalled near the 10-day moving average, which could limit the upside today. Prices continue to trend lower on the daily bar chart, which is likely to continue until the cash market rebounds. The CME lean hog index is down another 12 cents to $90.58 as of May 26. Pork cutout fell 50 cents to $98.35 Wednesday, led by losses in picnics and ribs.