Ahead of the Open | June 17, 2022
GRAIN CALLS
Corn: 10 to 12 cents higher.
Soybeans: 7 to 8 cents higher.
Wheat: 4 cents lower to 2 cents higher.
GENERAL COMMENTS: Corn futures rose to the highest levels in over four weeks overnight and soybeans also firmed on concerns extreme heat in the Midwest will stress young crops. Wheat futures were mixed ahead of the three-day holiday weekend. Malaysian palm oil futures ended the week with a 7.8% loss and hit a four-month low amid expectations for higher supplies from Indonesia. Front-month U.S. crude oil futures are down more than $1. U.S. stock futures signal a firmer open, while the U.S. dollar index is nearly 900 points higher this morning.
Markets and government offices are closed for the Juneteenth federal holiday on Monday, June 20, and there will be no Pro Farmer market updates.
USDA reported daily corn sales totaling 105,664 MT for delivery to “unknown destinations” during 2021-22 and 144,907 MT for delivery to Costa Rica for 2022-23.
The expected weekend heat wave in the central U.S. “looks the same as it did Thursday,” with extreme highs of 95 to 105 degrees Fahrenheit from Texas to the Dakotas and Minnesota, World Weather Inc. said today. Extremes of 105 to 110 degrees will be possible in a few central Plains locations. The hottest weather is expected in the Southern Plains and Southeast during the middle to end of next week, bringing “oppressive heat and humidity” with highs in the upper 90s to 104 degrees.
Russia is in contact with Turkey regarding the export of grain from Ukraine but there are a lot of uncertainties from the Ukrainian side, Kremlin spokesperson Dmitry Peskov told reporters on Friday. France’s president said he saw little chance of an agreement with Russia for now to get grain out the Ukrainian port of Odesa but said there were talks to regenerate rail routes linking Odesa to the Danube River in Romania as an alternative.
Most top executives say they think a recession is looming or already here, according to the new survey by the Conference Board, reflecting a rapid deterioration of the economic outlook among business leaders. More than 60% of CEOs expect a recession in their geographic region in the next 12 to 18 months, according to a survey of 750 CEOs and other C-suite executives. An additional 15% think the region of the world where their company operates is already in a recession.
The condition of France’s soft wheat crop deteriorated for a seventh consecutive week. The country’s ag ministry rated the crop 65% good/excellent, down a point from the previous week. Crop ratings have plunged 24 percentage points since the beginning of May amid extended heat and dryness across the country. France is currently facing intense heat as the wheat crop nears maturity. Strategie Grains expects further loss of yield potential from the heatwave.
Argentina’s 2022-23 wheat planted area estimate could be cut further if drought persists in large parts of producing areas, the Buenos Aires Grains Exchange warned on Thursday, adding chances were slim for strong rainfall. The exchange currently forecasts wheat planted area at 6.4 million hectares, down from its original projection of 6.6 million hectares. In its monthly weather report, the exchange is heading toward a “severe, dry and cold winter” during the July to September period.
Malaysia will maintain its July export tax for crude palm oil at 8%, based on a reference price of 6,732.26 ringgit ($1,530.41) per metric ton. The tax maxes out at 8% when the reference price is above 3,450 ringgit per metric ton.
CORN: July corn futures overnight reached 7.99 3/4 and December futures hit $7.48 3/4, the highest intraday prices for both contracts since May 18. The lead contract is heading for a sharp weekly gain after ending last week at $7.73 1/4.
SOYBEANS: July soybeans rose to $17.24 1/2 overnight but the contract is still poised for its second weekly decline in the past three after ending last week at $17.45 1/2.
WHEAT: Nearby SRW wheat firmed overnight while nearby HRW futures were down slightly, but both markets traded inside Thursday’s ranges. July SRW wheat is on track for a modest weekly gain after ending last week at $10.70 3/4.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-firmer
CATTLE: Live cattle futures are expected to gain support from a jump in cash prices this week driven by Plains heat constraining supplies. USDA-reported live steers averaged $144.10 through Thursday morning, up $4.00 from last week’s average. Movement on the wholesale market was strong this week with retailers making final purchases ahead of Father’s Day and Independence Day. But strong movement came amid lower prices, signaling the wholesale market is likely to weaken once these “beef” holidays have passed. Choice beef cutout values fell $1.06 Thursday to $267.16. August live cattle fell 50 cents Thursday to $136.30, up from $136.20 at the end of last week.
HOGS: Lean hog futures are expected to find support from strength in cash and wholesale markets. The CME Lean Hog index is up another 18 cents after hitting a 10-month high at $108.57. Pork cutout values jumped $5.57 Thursday to $111.36 behind a gain of more than $10 in bellies, though movement was light at 208 loads, indicating retailers aren’t interested in buying a lot of product with cutout values above $110.00. July lean hogs surged $1.30 Thursday to $109.575, a two-week high and up from $105.475 at the end of last week.
