GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: 13 to 16 cents higher.
GENERAL COMMENTS: Grains continue to lead strength, rebounding from last week’s losses. Both corn and wheat continue to correlate strongly with crude oil. Soybeans saw impressive gains overnight as well but have stalled near last week’s highs. Front-month crude oil futures are trading above $100 this morning. The U.S. dollar index is up over 300 points.
The annual inflation rate rose to 3.8% in April, the highest since May 2023 and above 3.3% in March. That was above forecasts of 3.7% as the rise in fuel cost pushed inflation higher. Energy costs jumped 17.9% last month. The figure marks a 0.6% monthly gain, below the 0.9% rise seen in March. Core CPI rose 2.8% year-over-year, the highest since September and up from 2.6% in March. Month-over-month, core CPI rose 0.4%, up from 0.2% in March.
Shipping traffic in the Strait of Hormuz remained at a standstill on Tuesday, with oil rising after President Trump rejected Iran’s latest counter-offer on a peace plan. Trump called Iran’s response to his proposal a “piece of garbage” and said the ceasefire was on “life support” as he prepares to meet Chinese President Xi Jinping in Beijing. The U.S. sanctioned a dozen entities and individuals over the sale of Iranian oil to China, stepping up economic pressure ahead of Trump’s visit to meet Xi. Trump fell short of signaling the U.S. would resume military attacks on Iran, as he previously threatened, and said reaching a diplomatic solution is “very possible.”
Last week’s rains in the western Plains didn’t help overall conditions when it comes to the long-suffering winter wheat crop. USDA Monday afternoon said the percentage of the crop rated “good” or “excellent” fell to 28% from 31% a week ago, defying forecasts for improvement to 32%. Of the 790 crop progress reports that have contained winter wheat condition ratings since 1986, only 20 weeks have seen a “good” to “excellent” rating less than the current standing. The lowest value seen in the data series was 20% during the week ending May 7, 1989. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 10.90 points to 253.00. The SRW crop notched a very minor increase of 1.07 points to 364.66. Weather in SRW country has helped the crop from deteriorating much further given the milder temperatures and relatively more widespread rains compared to those in the Plains.
CORN: July corn futures continue to boast impressive gains. Bulls are eyeing last week’s high of $4.87 1/2. Support lies at $4.73 3/4 on profit-taking.
SOYBEANS: July soybeans continue to encounter resistance near last week’s highs. Resistance stands at $12.22 3/4 then $12.26 1/4. Bulls are looking to hold support at $12.04 1/2 on weakness.
WHEAT: July SRW futures continue to press higher. Next resistance stands at $6.50, which his reinforced by the April 28 for-the-move high close of $6.57 3/4. Support comes in at $6.29 3/4, the 10-day moving average, on a reversal lower.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open higher as President Trump quickly rescinded his comments on removing beef tariffs. Futures faced heavy selling as Trump mentioned removing tariffs on foreign beef to help ease high costs, comments he took back after the close. Cash cattle averaged a record $258.52 last week, up $3.50 from the prior week. Choice beef rose $2.83 to $391.22 Monday, continuing the recent uptick.
HOGS: Lean hogs are expected to open with a mostly weaker tone amid technical selling. Futures bounced on corrective buying Monday but stalled shy of the 10-day moving average in June futures, which remains key resistance today. The CME lean hog index is down another 38 cents to $90.41 as of May 8, extending the recent slide. Pork cutout slid 58 cents to $96.98 Monday, led by losses in bellies.