GRAIN CALLS
Corn: 4 to 7 cents higher.
Soybeans: 3 to 5 cents higher.
Wheat: Winter wheat 4 to 6 cents higher; HRS 5 to 7 cents higher.
GENERAL COMMENTS: Corn and wheat led strength overnight, while soybeans are challenging key technical resistance. Grains were supported by a post from Trump this morning saying “deal with China done.” Outside markets are supportive this morning as front-month crude oil futures continue to press higher while the dollar index is under pressure, down around 275 points.
Consumer inflation ticked up in May, as the Bureau of Labor Statistics reported the consumer price index (CPI) rose by 2.4% in May, up from a four-year low of 2.3% in April. That was still below forecasts of 2.5%. On a monthly basis, CPI increased 0.1%, below 0.2% in April and forecasts of 0.2%. Increases in shelter costs led inflation higher. Meanwhile, annual core inflation which excludes volatile food and energy prices, remained at 2.8%, holding at 2021-lows, while expectations were pointing to a rise to 2.9%.
U.S. and Chinese officials said after two days of meetings in London they had agreed on a framework deal to keep the trade truce intact and remove China’s export restrictions on rare earths. Commerce Secretary Howard Lutnick said the framework deal puts “meat on the bones” of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs. Lutnick said the agreement would remove restrictions on Chinese exports of rare earth minerals and magnets and some of the recent U.S. export restrictions “in a balanced way,” but he did not provide specific details. As trade officials prepare to brief their respective leaders, both sides appear eager to avoid a collapse in negotiations — but the road to ratifying the deal remains politically charged.
The U.S. and Mexico are reportedly nearing a deal to reduce or eliminate President Donald Trump’s 50% steel tariffs on imports up to a certain volume. An industry source familiar with the talks told Reuters that a likely outcome would include a quota arrangement, under which a specified volume from Mexico could enter duty free or at a reduced rate and any imports above that level would be charged the full 50% tariff. The specific volume level of the quota was not yet determined.
CORN: July corn futures led strength overnight. Next resistance stands at $4.46 3/4, the 20-day moving average, which is reinforced by downtrend resistance at $4.49. Initial support comes in at $4.42, while a break below that mark would have bears eyeing support at $4.38 1/2.
SOYBEANS: July soybean futures pushed higher overnight. Bulls look poised to challenge stiff resistance at $10.64, which is reinforced by resistance at $10.70 3/4. Support stands at $10.56 then the 10-day moving average at $10.54 on a reversal lower.
WHEAT: July SRW futures bounced overnight. Gains stalled near initial resistance at $5.40, while additional strength looks to challenge resistance at $5.50. Support lies at $5.34 1/2 then yesterday’s low of $5.30 3/4 on a reversal lower.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle and feeders are expected to open with a mostly firmer tone as futures continue to be supported by steep discounts to the cash market. Live cattle futures are likely to continue the recent trend of relative weakness early in the week and strength in the latter portion of the week. Traders have been hesitant to push prices higher early in the week as they are concerned over a potential downturn in the cash market, which has led to illiquid and choppy trade. Wholesale beef prices have regained upward momentum. Boxed beef prices jumped $4.51 to $371.76 for Choice and 91 cents for Select to $359.84 on Tuesday
HOGS: Lean hog futures are expected to open higher in a continuation of yesterday’s strength. The upward trend in cash fundamentals continues to support futures. The CME lean hog index is up another 92 cents to $99.97 as of June 9. Pork cutout rose 59 cents to $110.88 Tuesday, led by strength in bellies and picnics. Movement has picked up from the lull over the past week. Pork plant margins have tightened amid the seasonally rising cash market but remain slightly in the black due to strengthening wholesale pork prices.