GRAIN CALLS
Corn: 5 to 7 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside in overnight trade. Prices are consolidating near recent highs in each market as uptrends remain in place. Front-month crude oil futures are trading above $80.00 once again and are solidly higher while the U.S. dollar index is down over 500 points following this morning’s inflation report.
The Consumer Price Index (CPI) showed its largest monthly decline since April 2020, shrinking odds of a Fed rate hike this year. Monthly CPI slid 0.4%, below expectations of a 0.1% decline. A drop in energy prices led inflation lower, as gasoline sunk 9.7%. Year-over-year, CPI rose 3.5%, below 4.2% in May and the first decline in five months. Core CPI, which strips out food and energy, was steady in June, below forecasts of a 0.2% gain. Year-over-year, Core CPI eased to 2.6%, down from 2.9% in May.
The National Weather Service today said a strong upper-level high-pressure system responsible for the recent all-time high temperature records in the West will continue to build eastward through the northern-tier states toward the East Coast over the next few days. This weather pattern will prolong the heat and humidity across the northern Plains to the Great Lakes, where high temperatures ranging from 95 to 105 will break some daily high temperature records this afternoon. Extreme heat warnings remain in effect across a large portion of the Great Basin through the northern Plains.
Nymex WTI crude back above $80 as Iran says Hormuz closed. “The interim peace between the U.S. and Iran has effectively collapsed after American forces reimposed a naval blockade and launched another wave of airstrikes, while Tehran attacked more oil tankers sailing through the Strait of Hormuz,” Bloomberg reported overnight. President Trump’s decision to restart a blockade of Iranian ports overnight came after hostilities between the two sides worsened in the past week, with tensions centered on control of the strait. Traffic through the all-important waterway has dwindled and oil has surged 20% since attacks rekindled, with Brent trading above $86 a barrel and WTI above $80. The U.S. launched airstrikes at military sites in several southern Iranian towns and cities over a five-hour period on Monday night. Iran targeted U.S. bases in Jordan and Bahrain and hit two oil tankers from the United Arab Emirates with cruise missiles. The latter attack killed an Indian crew member and wounded about eight others. Trump late on Tuesday said the strait was “open” but added to the chaos for energy companies and shippers by saying he would demand a reimbursement fee of 20% on all cargo shipped through. That would account “for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” he said on Truth Social.
CORN: December corn futures closed Monday’s gap overnight. Bulls are looking to hold support at $4.33 on continued selling. Resistance lies at $4.38 1/2 then yesterday’s close of $4.41.
SOYBEANS: November soybean futures continue to consolidate in a bull flag on the daily bar chart. Support comes in at $11.79 3/4 on persistent selling pressure, while key resistance continues to hold at the psychological $12.00 mark.
WHEAT: September wheat futures continue to consolidate. Bulls are looking to hold support at $6.25 then $6.19 3/4 on persistent selling. Resistance comes in at $6.40 1/4 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeder futures are expected to open with a mostly firmer tone on profit-taking, but a continuation of recent selling pressure can’t be ruled out. Bulls managed to open prices higher Monday but bears managed to take hold of the session as the day went on, closing prices lower for the 11th straight session in fats. Cash cattle slid $7.11 to $248.01 last week, spurred lower by losses in futures. Choice beef plunged $7.07 to $375.61 Monday, further pressuring packer margins.
HOGS: Lean hog futures are expected to open with a mostly firmer tone supported by technical buying. Bulls are looking to maintain the ongoing uptrend on the daily bar chart as prices dipped to strong technical support late Monday. The CME lean hog index is up another 42 cents to $93.11 as of July 10, extending the recent rally. Pork cutout rose 21 cents to $101.55 Monday, led by gains in hams.