10:30 a.m. Market Snapshot | June 14, 2021
Corn futures have worked well off the overnight lows but are still 20-plus cents lower on pressure from an improved weather outlook.
- Only 15% to 20% of the Corn Belt received enough rain over the weekend to improve soil moisture conditions, according to World Weather Inc. But forecast models are signaling notably cooler and wetter conditions are likely from this weekend through all of next week.
- Rains are likely to favor southern and eastern areas of the Corn Belt. Drier western and northern areas are likely to see only limited rainfall. And temps will be hot ahead of the rain chances.
- Aside from weather, traders will focus on this afternoon’s crop condition update from USDA to see if there’s further deterioration after ratings dropped more than expected in last Monday’s report. There’s a divide between crop conditions in western and norther areas where it’s been hot and dry, and southern and eastern areas where it’s been wetter.
- Weekly corn export inspections totaled 1.544 MMT, up from 1.427 MMT last week and about in line with the pace needed to hit USDA’s upwardly revised old-crop export forecast.
- December corn futures filled last Monday’s chart gap overnight but stopped short of testing the 20-, 40- and 50-day moving averages. That triggered some intraday buying and a price rebound off the lows. July corn futures are below their 20- and 40-day averages.
Soy complex futures are sharply lower at midsession, with nearby soybeans sinking near two-month lows.
- Grain and soy futures extended an overnight nosedive after weekend rainfall and a cooler, wetter outlook eased concern that recent extreme heat may hurt crops.
- Nearly 2 inches of rain fell in eastern Nebraska over the weekend, while western Iowa, central Illinois and parts of Indiana and Ohio also received rainfall, according to World Weather Inc.
- Today’s Midwest weather outlook is wetter for late this week through the end of next week, bringing some temporary relief from dryness, though some areas may be very warm, World Weather said. “Sufficient rain will fall in the central and eastern Midwest to maintain a very good outlook for corn and soybean development,” World Weather said.
- Traders will check the next weekly USDA Crop Progress reports, scheduled for release later today, for signs of improvement in soybeans. A week ago, the USDA rated the soybean crop 67% “good” to “excellent,” lower than expected.
- The U.S. inspected 128,092 MT of soybeans for export the week ending June 10, falling short of expectations and sliding nearly 112,000 MT from the week prior.
- November soybeans fell as low as $13.81 1/4 overnight, the contract’s lowest price since $13.81 on June 1 and testing the 40-day moving average around $13.81 1/2.
- July soymeal futures fell as low as $371.50, the lowest since November; September meal sank to $377.30.
Wheat futures are facing double-digit losses in HRS and HRW contracts, with the spring wheat market leading the price decline. SRW futures have trimmed losses to 6 cents at midmorning.
- Much of the Northern Plains received some rains last week, which is pressuring spring wheat futures this morning. But given significant soil moisture deficits in the region, these rains will provide temporary relief and more will be needed.
- Wheat is also being pressured by spillover from the sharp losses in the corn and soybean markets.
- Winter wheat harvest is advancing, which will put seasonal pressure on the market as farmers sell and commercials hedge their new-crop arrivals.
- Weekly wheat export inspections totaled 17.6 million bu., down from 18.1 million bu. the previous week.
- September HRS futures filled the June 1 chart gap and spiked the 20- and 40-day moving averages overnight. But the contract has rebounded.
Feeder cattle futures are sharply higher. Live cattle opened near unchanged but have firmed.
- Feeder cattle futures are being supported by weakness in the corn market. Given elevated corn prices, feeders remain very responsive to day-to-day movement in corn.
- The strength in feeder cattle has spilled over to the live cattle market after a quiet opening.
- The discount June live cattle hold to the cash market is providing additional support to the lead-month contract.
- The cash cattle market was about steady again last week. USDA will update the average price later this morning. Initial thoughts are the cash market will be about steady again this week.
- Choice boxed beef prices weakened the final two days last week, so traders will be watching for further weakness that could signal the strong price rally is exhausted.
Hog futures were mostly lower at midsession, with July contract dropping to the lowest level in over a week.
- A week after climbing to contract highs, hog futures’ months-long uptrend is showing signs of fatigue amid a softer tone in cash markets and expectations for larger pork supplies.
- Most-active July futures fell as low as $118.50, the lowest intraday price since June 4. Downside support includes the 20-day moving average around $117.50 and the 40-day moving average at about $113.10. Upside levels to watch include the contract high of $123.60 reached June 7 and matched the next day.
- October futures gapped lower at today’s open, but price action has since closed that gap. The June contract, which expires today, rose slightly.
- Hog futures remain in a longer-term uptrend driven by robust export demand and historically high pork prices that may limit price downside to corrective selling. Still, traders are watching for a seasonal peak.
- The national direct cash average carcass base price ended last week at $119.26 per hundredweight, up 9% from $109.40 a week earlier, according to USDA reports.
- Carcass cutout values ended the week at $132.54, down 9 cents from the previous week but almost double $69.46 a year earlier.
