10:30 a.m. Market Snapshot

July corn futures are mildly firmer, while new-crop futures are 8 to 10 cents lower.  

• Traders are bull spreading the market this morning, as new-crop futures are under pressure and the July contract is near unchanged. 
• Pressure on new-crop corn futures comes from weather as southern and eastern areas of the Corn Belt are expected to receive rains. But rains are expected to be light and scattered across dry western and northern areas of the region.
• Weekly ethanol production rose 33,000 barrels per day (bpd) to 1.07 bpd, which was the highest since the end of February 2020. However, ethanol stocks rose for a second straight week as gasoline demand was the lowest since the week ended March 12.
• Traders are taking some profits out of the long side of the market ahead of tomorrow’s Supply & Demand Report, though traders expect USDA to trim its old- and new-crop ending stocks forecasts versus last month.
• A 1/4-cent gap remains open on the December corn chart at June 4 high at $5.92 3/4. If that gap is filled, chart-based seller interest is likely to increase.

Soybean futures are mostly 20-plus cents lower at midmorning. Soymeal is $4-plus lower, while soyoil is posting losses in excess of 120 points in most contracts.

• Soybean futures are being pressured by weather, as the southern and eastern Corn Belt, along with the Mid-South, Delta and Southeast will benefit from rains. Western and northern areas of the Corn Belt are expected to remain mostly hot and dry, with just light, scattered rains expected.
• Export demand for U.S. soybeans is slowing seasonally as foreign buyers source most of their needs from South America. Even with some transport restrictions due to low water levels on the Parana River, Brazil and Argentine soybean exports are dominating global trade, as they typically do after the South American harvest.
• Soy crushing in Argentina reached a six-year high in April when 4.2 MMT of soybeans were processed, the CIARA-CEC chamber of oilseed processors reported.
• Traders are preparing for tomorrow’s Supply & Demand Report in which traders expect USDA to mildly increase its old- and new-crop ending stocks forecasts versus last month.

Wheat futures are lower at midsession, led by sharp declines in spring wheat.

• Recent rainfall in the dry Northern Plains and expectations for additional moisture triggered selling in wheat futures.
• Rains of 0.24 inch to as much as 1.94 inch fell over the past day in eastern Montana and the western Dakotas, according to World Weather Inc.
• More rain is slated for the northern U.S. Plains and Canada's Prairies during the next few days, but this is not a “long-term” trend changer, World Weather said, and more drying will return to these areas beginning late this weekend and lasting for an extended period of time.
• In export news, Algeria bought between 420,000 MT and 500,000 MT of milling wheat from optional origins in an international tender. Ethiopia issued a new tender to buy 400,000 MT of milling wheat.
• The wheat trade awaits the USDA’s next monthly Supply and Demand report, scheduled to be released tomorrow morning.
• September HRS futures closed yesterday below the five-day moving average and spiked the 10-day average overnight, with more critical support being the June 1 gap from $7.50 to $7.41 1/2. Near-term resistance starts at the five-day average near $7.90 and extends to Monday’s contract high at $8.45 3/4.
• July SRW earlier today fell to $$6.74 3/4, the contract’s lowest price since $6.69 1/4 on June 3.

Live cattle futures are narrowly mixed. Feeder cattle futures are slightly to moderately higher.

• Feeder cattle are getting a modest lift from a drop in corn futures, which are under pressure amid prospects for rain relief in parts of the Midwest.
• Live cattle futures appear to be in a bit of a holding pattern, supported by strong exports but pressured by slow cash trade and a recent downtick in beef prices, which may suggest restaurants and retailers have mostly satisfied their near-term needs.
• Cash cattle trade in the Southern Plains was at a standstill earlier this week, with not enough purchases to establish a trend, USDA reported. Live steers yesterday averaged $120 in major feedlot regions, compared to an average of $119.92 last week, USDA data showed.
• Choice boxed beef cutout values yesterday averaged $338.61 per hundredweight, down 1 cent from Monday, USDA reported. Cutout values are down from a 12-month high of $340.55 per cwt. reached June 3, but still up 61% from about $210 per cwt. at the end of 2020.
• Downside may be limited by futures’ discount to cash cattle. June live cattle are currently trading at nearly a $3 discount to last week’s average cash price of $119.92.
• Cattle futures’ technical posture weakened recently and the market remains in roughly a two-week downtrend. Key support levels include yesterday’s August low at $117.225 and a June 1 spike low at $114.625. A close above $121.225 in the August contract could restore more of an upward bent.

June lean hog futures are firmer, while mixed to higher trade is being seen in deferred contracts.

• June lean hog futures are being mildly supported by strength in the cash and product markets. Buyer interest is being limited by the contract’s almost $4 premium to the cash index.
• The average national direct cash carcass price rose $1.93 yesterday to $112.34, while the pork cutout value rose 21 cents to $134.94.
• Some profit-taking is being seen in deferred lean hog futures again this morning. But seller interest is limited. Similar trade was seen yesterday and the market finished mixed.
• The prospect of seasonally increasing supplies, especially after early August, is limiting buyer interest in deferred hogs.