GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 to 3 cents higher.
Wheat: SRW 2 to 4 cents lower; HRW 7 to 10 cents higher; HRS 4 to 6 cents higher.
GENERAL COMMENTS: The grain and soy markets saw relatively tight ranges overnight considering the big moves following USDA’s Tuesday reports. Key will be how wheat reacts today given limit higher closes yesterday afternoon. Outside markets are relatively quiet this morning as well as front-month crude oil futures are near unchanged while the U.S. dollar index continues to work higher.
Producer inflation surged in April, climbing 1.4% month-over-month, the biggest monthly increase since March 2022. That was above the 0.7% gain in March and well above forecasts of 0.5%. Gasoline prices led the increase, surging 15.6%. Year-on-year, producer prices jumped 6%, the biggest monthly increase since December 2022. Core producer price inflation, which exclude food and energy, rose 1% month-over-month, the most since March 2022. That is well above March at 0.2%. Year-over-year, core PPI rose 5.2%, well above market forecasts.
President Trump repeated his military threats against Iran ahead of a visit to China, saying Iran will either “make a good deal” with the U.S. or face devastation. A ceasefire between the U.S. and Iran has lasted over a month but is fragile, with Trump describing it as being on “massive life support” and Tehran continuing to resist U.S. demands. The closure of the Strait of Hormuz is deepening the impact on the energy market, with the International Energy Agency saying oil inventories are falling at a record pace and will continue to drop for months.
Trade negotiators led by U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng held talks in Seoul to prepare for this week’s summit between Presidents Trump and Xi Jinping. “The war in Iran and the latest developments in bilateral trade were likely among the topics topping the agenda during talks lasting about three hours, which concluded around 3:50 p.m. local time,” said a Bloomberg report. The two sides “held candid, in-depth and constructive exchanges in South Korea on economic and trade issues of mutual concern, as well as on further expanding practical cooperation,” the official Xinhua News Agency reported. No US readout of the discussions has been provided yet, said the report.
CORN: July corn futures consolidated overnight. Bulls are eyeing resistance at $4.85 on a continuation of recent strength. Stiff support lies under the market at $4.75.
SOYBEANS: July soybeans continue to work higher. Resistance stands at $12.40 on persistent strength, the for-the-move high close ahead of the March selloff. Support comes in at $12.25 then $12.20 on a reversal lower.
WHEAT: July SRW futures saw modest selling pressure overnight. Support comes in at the overnight low of $6.67 on a push lower. Resistance stands at $6.80 on resurgent strength.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone. Fats ended Tuesday in the lower end of the recent consolidation range, which could spur profit-taking today. Cash cattle trade initiated early this week, averaging $259.71 thus far, above last week’s record. Choice beef slid 49 cents to $390.73 Tuesday, giving up a portion of recent gains.
HOGS: Lean hogs are expected to open with a mostly firmer tone amid corrective strength. June hogs closed at a fresh for-the-move low but are near support. Bulls need to take a stand soon as a break below yesterday’s low would likely accelerate losses. The CME lean hog index is up 7 cents to $90.48 as of May 11, ending the recent string of losses. Pork cutout slid $1.48 to $95.52 Tuesday, led by losses in loins.