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GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 6 to 8 cents higher.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: Soybeans led strength overnight and are toying at a technical breakout on the daily bar chart. Corn and wheat saw strength as well, but did see an increase in selling pressure going into the break. This morning’s export sales report was delayed but noted lower than expected sales across the board, which likely weighed on prices. Outside markets are mixed this morning as both front-month crude oil futures and the U.S. dollar index are trading lower.
The U.S. economy added 57,000 jobs in June, well below the downwardly revised 129,000 jobs in May and forecasts of 110,000 jobs. That markets the lowest jobs number in four months. The weaker than expected jobs figure is likely to pare rate hike odds on the futures market. Meanwhile, the unemployment rate slid to 4.2% from 4.3% previously. Despite lower than expected jobs numbers, the labor market remains tight.
Federal Reserve Chairman Kevin Warsh on Wednesday said price risks have come down in recent weeks, while repeating his determination to bring inflation back to the U.S. central bank’s 2% target. “Expectations of inflation over the first four weeks of this period have come down, inflation risks have come down,” Warsh said Wednesday at the European Central Bank’s annual Forum on Central Banking in Sintra, Portugal, according to Bloomberg. He doubled down on a message from his first press conference as Fed chairman last month that the central bank will deliver price stability. Two-year Treasury yields fell to their lows of the session after Warsh’s remarks. Warsh didn’t cite the specific price indicators he was monitoring. The most recent reading for the Fed’s preferred inflation gauge showed a 4.1% jump from a year before, with core prices, excluding food and energy, up 3.4%. Energy and gasoline prices, however, have plunged in recent weeks as the US and Iran engaged in peace talks.
The Trump administration has opted not to renew a trade agreement with Mexico and Canada, kicking off a decade-long review process that will require yearly talks. “The United States did not agree to renew the USMCA in its current form,” U.S. Trade Representative Jamieson Greer said on Wednesday, the deadline for implementing a 16-year extension favored by Canada and Mexico. The stakes are particularly high for corn growers, given the role both trade partners play in demand. “USMCA is the single most important trade agreement to the corn industry, with Mexico serving as the largest purchaser of corn and Canada serving as our largest ethanol market,” said Jed Bower, president of the National Corn Growers Association, in a statement. “Additionally, the dispute settlement mechanism in the agreement has been critical for corn growers challenging harmful policies impacting biotechnology access.”
CORN: December corn futures are working higher for the third consecutive session. Bulls are eyeing resistance at $4.46 1/4, the 20-day moving average, on continued strength. Support comes in at $4.40 1/2 then $4.34 3/4 on a turn lower.
SOYBEANS: November soybean futures are butting up against resistance at the 40-day moving average at $11.55 1/4. A close above that mark would be the first since its failure as support on June 3. Additional resistance stands at $11.61 1/4. Support comes in at $11.50 then $11.39 on a reversal lower.
WHEAT: September SRW wheat continue to work higher. Bulls are looking to overcome resistance at $6.05 1/2 on persistent strength which sees little reinforcement until $6.12 1/2. Support comes in at $5.92 3/4 on a push lower.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Cattle futures are expected to open with a mostly firmer tone on corrective buying. Prices have been reluctant to break much below Tuesday’s low, with firm support under the market as futures remain well below the cash market. Cash trade has had a slow start this week, with just modest head trading hands at $256.00. Choice beef slid $1.90 to $391.26 Wednesday, giving up some of the recent gains.
HOGS: Hog futures are expected to open with a mostly firmer tone in a continuation of the recent uptrend. Bulls hold a modest technical advantage on the daily bar chart despite yesterday’s decline. Still, premiums to the cash market could limit the upside. The CME lean hog index is up 24 cents to $91.48 as of June 30, ending the string of recent losses. Pork cutout rose 22 cents to $95.71 Wednesday, led by gains in loins and ribs, but movement was light at 239.4 loads.