10:30 a.m. Market Snapshot

Corn futures are firm at midsession, erasing earlier sharp losses, with July up 5 cents and December up a penny.
 

• Corn futures extended steep Tuesday losses this morning on followthrough long liquidation and some light new selling amid a lack of early buying. After July and December corn tested support this morning and held, the selling faded and fresh buying emerged to help prices recover.
• Yesterday’s collapse in the corn market, regardless of the cause, was very damaging to the corn market charts.  Meanwhile, basis is beginning to break. Corn basis is only held together by outstanding margins in the ethanol sector, and their desire to lock them in for the driving season.
• Prices fell this morning after Bloomberg reported China is clamping down on some corn imports amid concern that overseas purchases have spiraled out of control, prompting several feed mills to cancel their U.S. cargoes. The total U.S. corn cancellations are estimated to be less than 1 MMT, Bloomberg said citing unnamed sources.  
• There were no new daily USDA export sales announcements or cancellations this morning.
• China's banking regulator has asked lenders to stop selling investment products linked to commodities futures to mom-and-pop buyers, to curb investment losses amid volatile commodity prices, three people with knowledge of the matter told Reuters.
• For now, the crop has been planted at the fastest pace since 2012 and recent rains have provided a mostly favorable start to the growing season. If the forecast verifies, most of the Midwest will get 1 inch to as much as 3 inches of rain the next seven days.  
• The key now looks to be where the high-pressure ridge sets up this summer and that may depend on the trend in Pacific Ocean temperatures the next 45 days. Recent cooling argues for the risks for warmer, drier summer weather.
• Weekly ethanol data showed production slowed to 1.011 million barrel per day (bpd), down 21,000 bpd from a week ago when output surged to the highest since before the pandemic. Ethanol inventories fell a larger than expected 453,000 barrels to 18.98 million, the smallest since December 20216 heading into the driving season.

Soybean futures were higher at midsession, rebounding from initial weakness, with the July contract up about 7 cents and November up 5 cents. Soymeal futures are also rebounding from earlier losses, posting gains of 10 cents to $1.20. Soyoil futures are down slightly.

• After forming a reversal down pattern yesterday, prices pushed lower to test support and found buying interest. Prices have moved higher at midsession amid the overall tight U.S. supply and demand story.
• New-crop futures remain under pressure from a mostly favorable weather outlook and above-average planting pace.
• Recent forecasts indicate some relief from dryness. Over the next five days, a cold frontal passage will bring rainfall totals to levels near to above normal over most U.S. crop regions, with the greatest surpluses, as much as 1.4 inch, from Oklahoma through Iowa.
• On Midwest cash markets, spot basis bids for soybeans were steady to weak at processors, flat at elevators and mixed at river terminals early Wednesday, Reuters reported.
• July soybeans fell as low as $14.89 1/4, the lowest price for the nearby contract since $14.80 on April 22, before rebounding sharply. The market’s technical posture would improve with a close above $15.40. 
• For soybean market bears, downside price objectives include a close below technical support at $14.50. Resistance includes Tuesday’s high of $15.38 1/4 and then at $15.50. 
• Soybean meal is also finding buying interest today after breaking key support Tuesday. The continued shipping and labor problems in Argentina may help to boost demand for U.S. exports.  

Spring wheat futures are trading mixed to lower lower. Winter wheat futures are down 2 to 7 cents at midsession.  

• Spring wheat futures are holding firm relative to winter wheat futures on drier forecasts for the Plains and Canadian Prairies after recent spotty rains were not enough to reverse drought conditions.
• Wet weather in the HRW belt the next week will aid some yields but may hurt quality and lower protein content. That will increase mill demand for spring wheat supplies, which are looking less robust.  
• USDA’s first spring wheat condition ratings of the season pegged 45% of the crop as “good” and “excellent,” the lowest initial crop conditions rating. Conditions in the northern U.S. Plains spring wheat belt have been dry.
• Harvest is one of the strongest seasonal pulls and it looks like we are going to have big crops of SRW and HRW to digest.
• The market needs to see better export sales to put a stronger floor under wheat prices.  

Live cattle futures are firming but still below Tuesday’s spike highs. Feeders are slightly lower.

• August live opened lower but are pushing back to the upside at midsession.
• Feeders are paring rallies at midsession amid the recovery in corn prices.
• Active cash trade on Tuesday was ranged from $118 to $123, steady to higher compared with last week’s trade. And the trend looks to hold for the rest of the week.
• Slaughter is up for the week, but another big Saturday kill is needed to reduce the supply of market-ready animals.  
• Boxed beef prices continued to climb, with Choice boxes gaining $2.09 and Select was 87 cents higher. Sales were sluggish but forward sales have been big and there is not much room for additional spot business, except at higher prices.

Hog futures were mostly lower, erasing earlier gains. 

• Hog futures erased initial gains after the July contract rose as high as $117.875. June lean hogs reached $115.250, the highest price for a nearby contract since August 2014.
• Hogs remain supported by continued strength in the pork market, dollar weakness and sharp declines in corn prices.
• Pork supplies have tightened on the eve of the U.S. summer grilling season. According to the USDA, U.S. pork stockpiles at the end of April were about 26% under year-ago levels.
• On cash markets, hog bids fell $1.89 on Tuesday, though the pork cutout value jumped $2.31, with bellies, butts and loins driving gains. Cutout values have climbed for three weeks.
• Strong pork demand is pushing slaughter higher. Tuesday’s kill was estimated at 485,000 head, an improvement from 466,000 head slaughtered last Tuesday.