Ahead of the Open | June 23, 2023
GRAIN CALLS
Corn: 15 to 25 cents lower.
Soybeans: 25 to 35 cents lower.
Wheat: SRW and HRW 14 to 20 cents lower; HRS 4 to 8 cents lower.
GENERAL COMMENTS: Corn and soybean futures faced active followthrough selling overnight amid forecasts calling for improved rain chances for the Corn Belt. Wheat futures actively followed to the downside. Weekly export sales were poor for corn and wheat – and nothing spectacular for soybeans. Outside markets are price-negative for grains and soybeans, with crude oil more than $1.00 lower and the U.S. dollar index nearly 500 points higher.
World Weather Inc. says hot temps in Texas may move into Kansas, Missouri and parts of Illinois during the weekend and again during the middle part of next week. Rainfall across the central Corn Belt will remain restricted over the next week, though some spotty showers and thunderstorms are possible. The second week of the forecast may provide better rainfall chances across the Corn Belt, but it may only be temporary relief.
World Weather says, “The GFS (American) weather model is trying to bring a tropical cyclone into the Gulf of Mexico during the second week of the outlook, this may or may not verify, but be assured that the feature will influence week two weather in many of the coming computer model runs. Confidence in a storm verifying is very low today.”
Export sales for the week ended June 15:
Corn: Net sales of 36,000 MT for 2022-23 fell 87% from the previous week and 74% from the four-week average. Net sales of 47,100 MT for 2023-24 were reported. Traders expected sales of 0 to 600,000 MT for 2022-23 and 0 to 200,000 MT for 2023-24.
Soybeans: Net sales of 457,500 MT for 2022-23 dropped 4% from the previous week but were up 98% from the four-week average. Net sales of 168,800 MT for 2023-24 were reported. Traders expected sales of 100,000 to 600,000 MT for 2022-23 and 0 to 300,000 MT for 2023-24.
Wheat: Net sales of 109,700 MT for 2023-24 were near the bottom end of expectations that ranged from 100,000 to 400,000 MT.
CORN: December corn futures sharply extended Thursday’s corrective pullback overnight, falling below the 5-day moving average. Support is at the February double-top at $5.98 3/4.
SOYBEANS: November soybean futures fell below the 5- and 200-day moving averages overnight as Thursday’s corrective pullback was sharply extended. Next support is at the psychological $13.00 mark and then the 100-day average near $12.94 1/2.
WHEAT: July SRW futures followed corn and soybeans lower overnight. Near-term support is the 5-day moving average at $7.15 3/4, followed by the psychological $7.00 mark.
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone after a strong price rebound on Thursday. Cash cattle trade ranged from $2 to $5 lower across the five-state area so far this week. Despite the lower prices, feedlots have moved quite a few cattle, knowing packers have a fresh supply of contract animals and a holiday-shortened slaughter schedule the first week of July. Given their big discount to the cash market, August live cattle posted strong gains on Thursday, marking this week’s low as key near-term support. Choice boxed beef prices firmed 22 cents on Thursday, while Select fell 45 cents. USDA reported net beef sales of 13,300 MT for 2023, up 4% from the previous week but down 14% from the four-week average.
USDA’s Cattle on Feed Report this afternoon is expected to show the June 1 feedlot inventory at 96.6%, May placements at 101.7% and May marketings at 101.6% of year-ago levels.
HOGS: Lean hog futures are expected to open with a mostly weaker tone after a poor close on Thursday. But seller interest should be limited, especially in the July contract, which finished at $91.85 on Thursday. Today’s cash index quote (as of June 21) is up another 85 cents to $90.47. That narrowed the premium in the lead-month futures contract to $1.38 – only about two days of gains based on recent cash index advances. The pork cutout value firmed 42 cents on Thursday. USDA reported net pork sales of 28,700 MT for 2023, up 7% from the previous week and 10% above the four-week average.
USDA’s Cold Storage Report this afternoon will detail meat stocks at the end of May. The five-year average is a 26.3-million-lb. decline in beef stocks and a 25.7-million-lb. drop in pork stocks during the month.
