Ahead of the Open | June 5, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 1 to 3 cents higher.
Wheat: SRW 2 to 4 cents higher; HRW and HRS 5 to 10 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat posted two-sided trade for much of the overnight session but firmed late. Crude oil will provide support as futures are nearly $2.00 higher this morning. But the U.S. dollar index is more than 350 points higher, which could limit buyer interest.
World Weather Inc. says dry weather will continue in the eastern Midwest this week, though some rainfall is expected during the weekend and early next week. Moderating temps will help conserve soil moisture until rains arrive. There are chances for periodic showers across the Plains and western Corn Belt this week. Better rain chances across the Corn Belt could develop around mid-month.
TASS news agency quoted Russia’s foreign ministry as saying that it was continuing consultations with the United Nations over the Black Sea grain deal, and that ship inspections had resumed. Talks are scheduled for Friday in Geneva with UN officials. However, the ministry said it saw no prospects for extending the Black Sea grain export deal, which currently runs through mid-July.
SovEcon forecasts Russia’s wheat exports in 2023-24 will reach a record 45.7 MMT, up 2.7 MMT from its prior forecast due to an increased production outlook and comments from Russia’s ag ministry that it plans no purchases for intervention stockpiles.
In May, Ukrainian grain exports reached a record 3 MMT through the Danube River, as shipments via Black Sea ports saw a significant slowdown. To expand its grain export routes, Ukraine is considering deepening the Danube shipping canal this year. Currently, the Danube is responsible for approximately 25% of Ukraine’s agricultural exports.
CORN: July corn futures pivoted around unchanged overnight after touching the highest level since April 24. The overnight high at $6.14 is initial resistance, followed by previous support at $6.15 3/4 and then the 100-day moving average at $6.24 3/4. Near-term support starts the 50-day moving average near $6.04 1/2.
SOYBEANS: July soybean futures pivoted around last Friday’s closing level and the 20-day moving average overnight. Near-term resistance extends from $13.62 3/4 to $13.83 3/4. Near-term support is at $13.48.
WHEAT: July SRW futures pivoted around last Friday’s high overnight. Near-term resistance is the 40-day moving average at $6.43. Near-term support is the 10-day moving average near $6.09.
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a firmer tone after bullish technical price action last week and support from surging cash cattle prices. While traders will have to wait until later this today for the official average cash cattle price for last week, it will be a new record high. Despite strong gains in futures last week, they are well below the cash market, which opens the door to more buying. But we can’t rule out a pullback amid profit-taking. Besides surging cash cattle prices, wholesale beef values are also strengthening. Choice boxed beef firmed $3.49 on Friday, while Select was $4.61 higher and movement was solid at 120 loads.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, though selling pressure could develop as the premium nearby futures hold to the cash index has widened. The CME lean hog index is 89 cents higher to $80.52 (as of June 1). That’s the strongest daily gain in a while, but traders are anticipating even more cash strength. June lean hog futures finished last Friday $6.205 above today’s cash quote. The pork cutout value fell 96 cents on Friday, while movement totaled 283.2 loads.
