10:30 a.m. Market Snapshot | June 10, 2021

Corn futures are 5 to 8 cents higher at midsession, led by old-crop July contracts.

• Hot, dry Corn Belt weather continues to support futures as the market awaits the USDA’s monthly Supply and Demand Report, scheduled for 11 a.m. CT.
• For Midwest corn and soybean areas, the European forecast model predicts minimal precipitation for the next 10 days, World Weather said, while the U.S. model offers better rain chances.
• Much of the Midwest “will experience a net decline in soil moisture over the next 10 days to possibly two weeks,” World Weather said today. “Scattered showers and thunderstorms are expected periodically, but resulting rainfall may have a tough time countering evaporation.”
• In the USDA’s Supply and Demand report, the government is expected to trim its old-crop corn carryover estimate by 50 million bushels to 1.207 billion bu. and lower its new-crop carryover forecast by 84 million bu. to 1.423 billion bu., according to analysts polled by Reuters.
• Conab slashed its Brazilian corn crop forecast by more than 10 MMT, dropping it to 96.39 MMT.
• Weekly USDA export data came in at the low end of expectations for corn. Net corn export sales for the week ended June 3 totaled 189,600 MT for 2020-21, down 64% from the previous week and down 39% from the prior four-week average. For 2021-22, net sales were 26,400 MT.
• Accumulated corn exports to date in the current marketing year, at 52.9 MMT, are still running 75% above the same period a year earlier, according to the USDA.
• December corn futures rose as high as $6.20 1/2, the contract’s highest intraday price since $6.31 1/4 on May 10. Further technical strength may put December in position to test the contract high of $6.38. A gap left on the daily chart earlier this week remains partially unfilled.

Soybean futures are trading mid- to high-range and up 7 to 8 cents.

• Movement of a high pressure system opens the possibility for some erratic showers in the dry western Corn Belt, but a drying trend is still expected to grip the region. Welcome rains are expected today and Friday for the Dakotas and into western Minnesota. Heavy rains are also expected from the Ohio Valley to the East Coast.
• The National Drought Monitor shows drought intensified and spread across northern and western areas of the Corn Belt, driving home the need for rain.
• Today, weather shares the spotlight with coming USDA reports. Old-crop soybeans carryover is expected to inch higher to 122 million bu. while new-crop carryover is expected to rise 6 million bu. to a still-tight 146 million bushels.
• The department is also expected to issue big Brazilian soybean crop estimates for both 2020-21 and 2021-22.
• Today, Brazil’s Conab estimates Brazil’s 2020-21 soybean crop at 135.86 MMT, a modest increase from its May forecast. It expects Brazil to export 86.65 MMT of those soybeans.  
• Soybean export sales of 15,700 MT for 2020-21 were within expectations, while sales of 105,000 MT for 2021-22 were near the low-end of the range of expectations. Exports of 278,700 MT were in line with the prior four-week average.

Spring wheat futures have rallied 8 to 10 cents. HRW wheat is roughly a nickel higher. And SRW wheat has softened to trade mixed.

• A line of showers and thunderstorms are expected to move across the Dakotas and into western Minnesota today, providing needed moisture for the spring wheat crop that’s rated at its lowest level on record.
• The Drought Monitor for the week ending June 8 shows some drought improvement in western areas of the Dakotas, but drought conditions worsened to the east of that.
• The market is also keeping an eye on elevated temperatures for the U.S. Southwest. Western areas of Texas are expected to see temperatures above 100 degrees F in the days ahead. Heat advisories are in effect on the Southern and Northern Plains today.
• USDA’s winter wheat crop estimate is expected to climb 20 million bu. from May.
• USDA is expected to trim old-crop wheat carryover to 869 million bushels. New-crop carryover is expected to rise 9 million bu. to 783 million bushels.
• Weekly wheat export sales totaled 325,900 MT for 2021-22 delivery, which was in line with expectations. Exports were solid.
• Strategie Grains raised its soft wheat production and export forecast for the EU to 131.1 MMT and 28.6 MMT, respectively.

Live cattle futures are split with nearbys slightly higher and deferred contracts under light pressure. Feeder cattle futures are down slightly.

• Cattle futures were mixed at midsession, with live cattle mostly higher and feeder cattle lower.
• Feeder cattle futures fell to the lowest level in over a week as corn prices continued climbing over concerns extreme heat and dryness in the Midwest will harm crops.
• Strong beef prices should continue to underpin cattle futures. Choice beef cutout values yesterday rose 4 cents to $338.65 per hundredweight, according to the USDA. Cutout values are down slightly from a 12-month high last week, but still up about 25% for the five-year average for this time of year.
• Live steers averaged $119.92 per hundredweight yesterday, matching last week’s average, amid slow to moderate cash trading early this week, according to the USDA.
• USDA reported net beef sales for the week ended June 3 of 16,100 MT, up 28% from the previous week, but down 17% from the prior four-week average. 
• August live cattle futures rose to a high for the week but remain within the range from the past couple weeks. Resistance likely extends from the May 25 high of $121.225 to $121,62, with support around the May 22 low of $115.925, plus pivotal support at the June 1 low of $114.625.
• August feeder cattle fell as low as $146.75, the lowest intraday price since $145.10 on June 1.

Lean hog futures are split with 2021 contracts slightly higher and deferred months slightly lower.

• USDA reported pork export sales of 19,700 MT the week ending June 3, which was a 24% drop from the prior four-week average. China was the lead buyer, closely followed by Mexico. Pork exports of 27,500 MT registered a marketing-year low.
• Today, the market will look to USDA’s Supply & Demand Report for an update on U.S. hog production and pork exports.
• Chinese pork prices have been falling as more cases of African swine fever prompted more aggressive slaughter. Plus, the country has been quickly rebuilding its hog herd. China’s pork needs the remainder of the year remain a questionmark.
• The pork cutout value fell 56 cents yesterday and movement tumbled to 262.73 loads. A big drop in ribs led the decline, with loins and belly prices also sliding.
• USDA estimates cash hog bids rose $2.66 at midweek, an encouraging sign given prospects for seasonally increasing supplies.
• Average hog weights in the Iowa/southern Minnesota/South Dakota market jumped 1.3 lbs. the week ending June 5 to 284.4 lbs., as JBS processing disruptions and the Memorial Day holiday slowed marketings.
• The market is also relieved workers at a South Dakota pork plant reached an agreement on contracts with the labor union and will not strike.