GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 3 to 5 cents lower.
Wheat: SRW 3 to 5 cents higher; HRW 5 to 7 cents higher; HRS 9 to 11 cents higher.
GENERAL COMMENTS: Grains saw relative strength overnight as crop conditions for corn, spring wheat and winter wheat were all below expectations. Soybeans saw relative weakness, giving up all of yesterday’s gains. Outside markets are mixed this morning as front-month crude oil futures are modestly firmer while the U.S. dollar index is around 300 points higher.
India has proposed significant tariff reductions to the U.S. to avert a looming 26% reciprocal tariff threatened by President Donald Trump, set to take effect on July 9. While New Delhi is open to lowering duties on various goods, it is steadfast in maintaining high tariffs on critical agricultural sectors, particularly foodgrains and dairy products, according to the Financial Times. Currently, tariffs on U.S. rice range from 70% to 80%, and dairy products face duties between 30% and 60%. In exchange for tariff reductions, India is requesting the U.S. to lower its tariffs on Indian exports from labor-intensive sectors such as textiles, leather and handicrafts. Additionally, India seeks exemptions from U.S. social security payments for its workers on short-term visas, similar to provisions secured in its recent agreement with the UK. Both nations aim to finalize the first phase of a bilateral trade agreement by fall, with a shared goal of doubling their trade volume to $500 billion by 2030. However, negotiations are complex, given contrasting priorities and the political sensitivities involved, particularly concerning agriculture in India and manufacturing in the U.S.
Japan is launching a multi-pronged effort to counter the fallout from stalled trade negotiations with the U.S., as steep tariffs — especially on autos — threaten a vital pillar of the nation’s economy. With summer elections looming and public discontent rising, Prime Minister Shigeru Ishiba’s government is injecting a ¥900 billion ($6.3 billion) emergency stimulus package and offering strategic concessions, including advanced shipbuilding cooperation, to regain traction with Trump ahead of the G7 summit.
USDA rated the winter wheat crop as 50% “good” to “excellent” and 19% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 5.4 points to 323.0, as all states except Colorado and South Dakota declined. The SRW CCI rating slipped 0.1 point to 374.7. Click here for details. USDA initially rated the spring wheat crop as 45% “good” to “excellent” and 18% “poor” to “very poor.” On our weighted CCI, that equated to a 328.9 rating, far below last year’s first rating of 378.6, which came one week later. USDA initially rated the corn crop as 68% “good” to “excellent” and 5% “poor” to “very poor.” The corn crop started the growing season with a 373.7 CCI rating, 11.8 points below last year’s initial rating that came one week later.
CORN: July corn futures continue to be caught between moving average support and resistance. The 40-day moving average stands as resistance at $4.64 1/4 while the 20-day moving average at $4.58 3/4 has capped the majority of the downside. Additional selling would find support at yesterday’s low of $4.56.
SOYBEANS: July soybean futures saw relative weakness overnight. Bulls failed to hold support at $10.59 1/4, marking that as a key pivot today. Resistance stands at $10.65 1/4, while bulls are seeking to hold support at $10.56 1/4. Continued selling pressure has bears targeting support at $10.51 1/4.
WHEAT: July SRW futures bounced overnight. Bulls struggled to break back above resistance at $5.35 1/4, the 10-day moving average, which is reinforced by resistance at $5.42. Support comes in at yesterday’s low of $5.28 1/2 on resurgent selling pressure.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle and feeders are expected to open higher as futures continue to erase discounts to the cash market. Cash cattle continued the historic climb, with last week’s average price climbing another 52 cents to a record $226.97. Trade late in the week took place just shy of $230.00, indicating the potential for strength again this week, but negotiations were light last week, suggesting packers likely have short-term needs met. Wholesale beef ended Tuesday mixed with Choice cutout firming 30 cents to $361.85 while Select slid 49 cents to $350.83.
HOGS: Lean hog futures are expected to open higher in a continuation of recent strength. June futures closed solidly higher on Tuesday, supported by continued strength in cash fundamentals. Yesterday’s jump in pork cutout was particularly supportive, as cutout climbed $2.27 to $103.73, driven by a $7.48 surge in primal bellies. That marked the highest quote for cutout since November. The CME lean hog index is up another 11 cents to $93.05 as of May 23, extending the seasonal climb.