GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: 5 to 8 cents lower.
GENERAL COMMENTS: Soybeans consolidated from Monday’s surge higher overnight while grains continue to show relative weakness, with corn near recent lows and wheat on contract lows. Outside markets were relatively quiet this morning despite tame inflation data. Front-month crude oil futures are modestly higher while the U.S. dollar index is around 375 points lower, giving up a portions of yesterday’s big gain.
CPI unexpectedly slowed in April as inflation eased to 2.3%, the lowest since February 2021, down 2.4% from March and below forecasts of 2.4%. Lower energy costs led CPI lower, with gasoline leading the decline, offsetting higher natural gas prices. Inflation also slowed for food and transportation. Meanwhile, costs for both used and new cars and trucks increased compared to the previous month.
A White House executive order on Monday said the U.S. would cut the “de minimis” tariff on shipments from China and Hong Kong to 54% from 120%, with a flat fee of $100 to remain starting from May 14. China has removed a month-long ban on airlines taking delivery of Boeing planes, people familiar with the matter told Bloomberg.
In a CNBC interview, U.S. Trade Representative Jamieson Greer confirmed he will first speak with an Indian official and then travel to Jeju Island for the APEC trade ministers meeting. His agenda includes meetings with Trade Minister Cheong In-kyo and Industry Minister Ahn Duk-geun to negotiate the “July Package” that could eliminate U.S. tariffs of up to 25% on Korean steel, autos and parts before the three-month pause expires on July 8.
USDA rated the winter wheat crop 54% “good” to “excellent” and 11% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 1.3 points to 328.6, despite a decline in top producer Kansas. The SRW crop improved 5.6 points to 374.9, despite a decline in top producer Illinois.
CORN: July corn futures continue to face selling pressure. Additional selling eyes support at last Thursday’s for-the-move low of $4.42 1/4, which is reinforced by support at $4.38 3/4. Resistance stands at $4.47 1/2 then the psychological $4.50 mark on a bounce.
SOYBEANS: July soybean futures consolidated from Monday’s surge higher overnight. Support at $10.65 1/4 limited the downside overnight and is reinforced by support at $10.60. Resistance stands at yesterday’s high of $10.74 3/4.
WHEAT: July SRW futures traded fresh contract lows overnight. A test of psychological support at $5.00 seems likely. Resistance stands at $5.15 then $5.23 1/4 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone in a continuation of recent buying, though overbought conditions could limit gains after the open. June live cattle scored a contract high Monday, though traders are wary that the recent strong gains in the cash market can continue given cutting margins are moving deeper into the red. Reports that the Mexican border may only remain closed for 15 days while the screwworm eradication/prevention strategy is reviewed could weigh on prices as well. Wholesale beef worked higher Monday as Choice firmed $2.17 to $348.14 while Select surged $4.06 to $335.23.
HOGS: Lean hog futures are expected to open with a mostly weaker tone in a continuation of yesterday’s selling pressure. June futures closed higher Monday, but they ended the day nearer session lows as pessimism surrounding the cash market continues to weigh on prices. While Chinese tariffs were sharply lowered, it is unclear how quickly that might support pork exports. The CME lean hog index is down another 7 cents to $89.92 as of May 9, the third straight daily decline, though daily losses have been relatively small. Pork cutout ended Monday $1.32 lower, giving up a portion of Friday’s big gains.