GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: Steady to 2 cents lower.
Wheat: SRW 11 to 13 cents higher; HRW 15 to 17 cents lower; HRS 9 to 11 cents higher.
GENERAL COMMENTS: The grain market continues to lead strength with wheat pushing to fresh highs. Soybeans are caught in the top end of the sideways range. Front-month crude oil futures are challenging the $100-mark, spurred higher by stalling negotiations in the Middle East. The U.S. dollar index is up around 200 points this morning.
President Trump convened his national security team to discuss Iran’s proposal to end a war now entering its third month. Trump will address the matter “very soon,” White House Press Secretary Karoline Leavitt told reporters on Monday. “His red lines with respect to Iran have been made very, very clear,” she said, adding they included preventing Tehran building a nuclear weapon. Iran has signaled it may be willing to accept an interim deal to reopen the Strait of Hormuz in exchange for Washington ending its blockade of Iranian ports, while postponing more complex negotiations over the country’s nuclear program. It is insisting on keeping some control over shipping through the strait, which Washington is unlikely to accept. Reports said Trump told his advisers he’s not satisfied with Iran’s latest suggestions.
Monday afternoon’s weekly USDA crop progress reports showed U.S. corn planting was 25% complete as of April 26, compared with an average estimate of 23% produced by a Bloomberg survey of analysts. That’s up from 11% last week and ahead of the five-year average of 19%. U.S. soybean planting was 23% complete versus an average estimate of 22% and up from 12% a week ago; 12% is also the five-year average for this time of year. U.S. spring wheat plantings were 19% complete versus an average estimate of 25% and up from 12%, while trailing the five-year average of 22%. U.S. winter wheat saw 30% of the crop rated good to excellent, unchanged from last week. Analysts had expected a slip to 29%, reflecting drought conditions and possible freeze damage to the hard red winter wheat crop in the Plains. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 6.35 points to 264.46 and continues to trend below the condition ratings for this time last year. The SRW crop remains in relatively better conditions but still declined 0.97 points to 359
Monetary policy makers in the U.S. and across the Group of Seven will probably keep their interest rates steady this week. The Federal Reserve’s Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. This FOMC meeting will likely be the last for Powell as head of the U.S. central bank. Canada, the U.K., Germany and Japan are widely anticipated to leave their interest rates unchanged, too.
CORN: July corn futures hit a one-month high overnight. Resistance comes in at $4.78 on continued strength. Bulls are looking to hold support at $4.70 then $4.64 1/4 on a reversal lower.
SOYBEANS: July soybeans have stalled in the upper end of the sideways range. Resistance stands at $11.92 then $12.01 1/4 on a persistent strength. Bulls are looking to hold prices above support at $11.83 3/4 then $11.77 3/4 on a turn lower.
WHEAT: July SRW futures are poised to challenge the March high of $6.49 3/4. Bulls remain in control of the technical advantage.Support comes in at $6.36 then $6.25 on a turn lower.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open higher in a continuation of recent strength. Prices look poised for a test of the mid-April highs around $252.00. Nearby have climbed above last week’s cash cattle average at $246.18. Cash prices will likely have to work higher before premiums in futures get too steep. Choice beef rose $2.56 to $389.56 Monday, helping ease the drop in packer margins, which remain in the red.
HOGS: Lean hogs are expected to open with a mostly firmer tone. Price action has been choppy over the past couple weeks as the cash market works to bottom. The CME lean hog index is down 18 cents to $91.26 as of April 24. That weakness could limit strength after the open. Pork cutout slid 38 cents to $99.23 Monday, led by losses in loins.