10:30 a.m. Market Snapshot | June 25, 2021

Corn futures enjoyed light buying overnight, but the market has since turned down. Futures are 12 to 13 cents lower, with July leading to the downside.

• Weather continues to weigh on the corn market, despite the fact this week’s rains have largely missed the northwest Corn Belt and Dakotas where moisture is most needed. Yesterday’s National Drought Monitor showed drought continued to intensify and spread in these areas.
• Overnight rains favored southern and eastern areas of the Corn Belt and heavy rain, flooding and severe storms are expected to stretch from Kansas to Indiana today, with more heavy rain possible on Saturday. Flash flooding and hail are possible.
• The U.S. Supreme Court today ruled in favor of small refineries in their attempt to get exemptions from biofuel blending requirements. That overturned a lower court decision saying EPA could only grant waivers to those that had previously received them. 
• AgroConsult lowered its safrinha corn crop estimate for Brazil, dropping its total corn crop estimate from 91.1 MMT to 90.2 MMT.
• Traders are also looking ahead to USDA’s June Acreage and Quarterly Grain Stocks Report on June 30. Analysts surveyed by Reuters expect USDA to report June 1 corn stocks totaled 4.144 billion bu., 859,000 bu. under year-ago. They expect USDA to peg corn plantings at 93.79 million acres, up 2.67 million acres from March intentions.

Selling has picked up in soybeans, with futures down 23 to 30 cents. Soymeal is posting solid gains, while soyoil is down 300-plus points.

• USDA has announced daily soybeans sales to China and unknown destinations three of this week’s four days, with total sales now at 1.178 MMT. These sales come in the midst of Brazil’s busy harvest season when Beijing typically sources soybeans from South America.  
• The Supreme Court’s ruling overturning a 10^th Circuit Court decision regarding small refinery exemptions caused soyoil futures to extend losses.
• USDA announced daily soymeal sales totaling 122,200 MT to Mexico — 84,150 MT for 2021-22 and 28,050 MT for 2022-23.
• But USDA did not announce any new daily soybean sales. Announcements of sales to China and unknown three of this week’s five days puts total sales at 1.178 MMT.
• USDA’s estimate of June 1 soybean stocks is expected to come in at a tight 787 million bu., a dramatic 594 million bu. under June 1, 2020. Its soybean planted acreage estimate is expected to rise from March intentions of 87.60 million bu. to 88.96 million bushels.

SRW wheat has tumbled 10 to 14 cents, while HRW wheat is down 3 to 5 cents. Spring wheat futures are 3 to 12 cents higher.

• Overnight rains once again missed key spring wheat producing areas, with the latest Drought Monitor showing conditions continue to deteriorate. A heat wave is building in the Pacific Northwest, which could further stress a drought-battered spring wheat crop.
• Rains over the next 10 days are expected to favor eastern and southern areas of the Corn Belt, with mounting odds for heat and dryness prolonging crop stress in July and August.
• USDA will provide an update on spring wheat plantings as well as quarterly grain stocks next Wednesday. Analysts expect USDA to report June 1 wheat stocks around 859 million bu., which would be a 169 million-bu. drop from year-ago. Spring wheat plantings are expected to come in around 11.41 million acres, down slightly from March intentions.
• Statistics Canada will also issue its Canadian crop plantings estimates on Tuesday.

• Pressure on HRW wheat is being limited to some degree by ideas a small spring wheat crop due will boost demand for higher-protein HRW supplies.
• Winter wheat harvest is underway, limiting buying in those markets. Flood warnings are in effect for some areas of Oklahoma today.
• French soft wheat crop ratings dipped to 79% good to excellent this week. But welcome rains are in the forecast. Some needed precip is also expected for eastern Europe and the Black Sea region.

Live cattle futures are trading well off session lows and slightly to moderately lower. Feeder cattle are enjoying moderate gains.

• Traders are readying for USDA’s Cattle on Feed Report that’s expected to show the number of cattle on feed as of June 1 up 0.5% from year-ago. Marketings are expected to surge 23.4% from year-ago (but drop 9.7% vs. May 2019), with Placements expected to dip 4.6% from year-ago.
• Cash cattle trade has ranged from $122 to $126 this week, marking the second week in a row of solid cash market gains. June live cattle is trading right in line with last week’s average cash price of $122.84.
• Stress on pastures and animals is building in northern areas, helping to lift cash prices to the north.
• Boxed beef values were mixed yesterday, with Choice down $4.63 and Select up 73 cents.
• Softer corn prices are lifting the feeder cattle futures. Traders are not concerned about the August contract’s roughly $11.50 premium to the cash index.

Lean hog futures are moderately higher in most contracts, with August futures leading gains.

• Yesterday’s Quarterly Hogs & Pigs Report did not deliver any major bearish surprises. Given heavy pressure leading up to the release, that cleared the way for some corrective buying to close out the week. The market was technically oversold.
• In addition, July figures hold a nearly $17 discount to the CME cash hog index. Since the contract is cash-settled, that gap needs to be closed soon.
• The market also welcomed news marketings of heavy pigs are slowing in China, helping spot prices and futures to improve.
• The pork cutout value climbed $5.17 yesterday, with bellies soaring $33.75. Continued strength today would add to ideas a short-term low is in the mix.
• But cash hog bids did drop a national average of $6.60 yesterday, according to USDA.