Ahead of the Open | June 29, 2023
GRAIN CALLS
Corn: 2 to 5 cents lower.
Soybeans: 2 to 5 cents lower.
Wheat: SRW and HRW 2 to 5 cents lower; HRS 1 to 3 cents higher.
GENERAL COMMENTS: Corn, soybeans and the winter wheat markets favored the downside overnight, though price action was subdued compared with the recent heavy selling. Spring wheat futures firmed amid mild corrective buying. Key today will be whether seller interest builds during daytime trade or markets take a breather after the price plunge over the past week. Outside markets are mildly price-negative for grain/soy futures with the dollar more than 350 points higher and crude oil modestly lower.
Several clusters of rain are moving across the Corn Belt this morning, including one in eastern Illinois/southwestern Indiana and another in eastern Nebraska/southwestern Iowa. World Weather Inc. says rainfall over the next 10 days will improve topsoil moisture for much of the Corn Belt, though additional rains will be needed after extended dryness. Kansas, Missouri and far northern areas of the region are expected to see the lightest rains.
Export sales for the week ended June 22:
Corn: Net sales of 140,400 MT for 2022-23 and 123,500 MT for 2023-24. Traders expected sales of (100,000) to 500,000 MT for 2022-23 and 0 to 200,000 MT for 2023-24.
Soybeans: Net sales of 227,400 MT for 2022-23 and 17,000 MT for 2023-24. Traders expected sales of 200,000 to 500,000 MT for 2022-23 and 0 to 200,000 MT for 2023-24.
Wheat: Net sales of 155,200 MT for 2023-24. Traders expected sales of 50,000 to 400,000 MT.
CORN: December corn futures have retraced more than 61.8% of the rally from the May low to last week’s high. Seller interest and volatility calmed overnight. Bears’ next downside target would be filling the June 12 gap at $5.33. The contract has shifted from heavily overbought on June 21 to oversold. That suggests the contract is due for a correction, though short-term momentum indicators aren’t typically good price predictors during times of extreme volatility.
SOYBEANS: November soybean futures stopped just shy of a 50% retracement of the rally from the May low to last week’s high on Wednesday and held above yesterday’s low overnight. That 50% retracement around $12.54 is bears’ next downside target.
WHEAT: December SRW futures have retraced more than 50% of the rally from the May low to Monday’s high. Bears’ next target is a 61.8% retracement at $6.75 1/2.
CATTLE: Choppy/higher.
HOGS: Mixed.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone after another solid performance by bulls on Wednesday. Traders may further narrow the discounts futures hold to the cash market. Cash cattle trade got underway around $2 lower than last week’s levels in both the Southern Plains and the northern market. June live cattle futures finished Wednesday $2.945 below last week’s average cash price, suggesting the expiring contract could see some additional price strength. August cattle remained $8.695 below the cash market. Wholesale beef prices continued to fade, with Choice down $1.33 and Select $1.75 lower. USDA reported net beef sales of 12,000 MT for 2023, down 9% from the previous week and 16% below the four-week average.
HOGS: Lean hog futures are expected to open with a mixed tone. Traders are awaiting USDA’s Hogs & Pigs Report this afternoon. It is expected to show the U.S. hog herd as of June 1 was fractionally smaller than year-ago. The CME lean hog index is up another 44 cents to $92.96 (as of June 27). Since bottoming in the third week of April, the cash index has rallied $21.78. While daily price gains haven’t been overly strong, the seasonal climb has been steady. June lean hog futures finished Wednesday at a $1.315 premium to today’s cash quote; August hogs held a $1.86 discount. The pork cutout value fell $1.08 on Wednesday. USDA reported net pork sales of 26,700 MT for 2023, down 7% from the previous week but 3% above the four-week average.
