10:30 a.m. Market Snapshot | June 4, 2021

Corn futures are near the session highs, trading 15 to 18 cents higher.

• December futures are trading near both session and weekly highs, but July is still about 15 cents below its weekly high set on June 1.
• Threatening weather has tempered selling interest and justifies a price risk premium.
• Crops across the northern U.S. are going from the freezer to the gas grill in less than a week. While a corn crop is not made in June, it is a time to build moisture reserves for the increased usage period in July. At least for the first half of June, a large piece of U.S. growing area will be net negative in moisture.
• A high-pressure ridge axis over North America may shift more over the western Plains and near the front Range of the Rocky Mountains over the next two weeks. This scenario would reduce rain in Canada’s Prairies and the northern U.S. Plains, while allowing some showers in the eastern and southern Midwest and down into the southeastern states.
• Temperatures are expected to rise above 90 degrees F over the weekend in many areas, followed by a second shot of excessive heat early next week.
• Today’s weekly USDA Export Sales Report held few surprises but leans slightly positive. Net old-crop corn sales of 531,100 MT were down 5% from last week but above the top end of trader estimates and included 158,500 MT sold to China including 63,800 switched from unknown destinations. Japan was the top buyer.
• New-crop corn sales of 439,500 MT were primarily to unknown destinations (227,000 MT). Sales were at the low end of trader estimates.

Soybean futures extended overnight gains this morning with futures up 25 to 28 cents at midsession and near weekly highs. Soymeal futures are trading $1.00 to $2.00 higher in most contracts. Soybean oil futures are leading higher with gains of 180 to 245 points. 

• The north-central U.S. weather forecast is crop threatening and conditions may get stressful in the coming weeks. European weather model’s monthly forecasts will be available on Saturday.
• The European model has correctly been drier than the U.S. forecasts and that has curbed selling interest and increased speculative long positioning this morning.
• Limited rainfall is forecast across the Plains and the northern half of the Midwest over the next two weeks. The Dakotas, Nebraska, Iowa, Minnesota and Michigan will be particularly dry.
• Net old-crop soybean sales totaled just 17,800 MT but not a reduction as some expected the week ending May 27. New-crop sales were 180,300 MT. China bought 10,000 MT, which may be slightly disappointing for market bulls betting on better business after last week’s price weakness.
• Meal sales rose 31% from the prior four-week average.

Wheat futures higher at midsession and near session highs.

• Wheat futures posted firm gains across all three classes. July SRW futures are poised to close above last week’s close of $6.63 1/2 a bushel.
• Prices remain underpinned by concern over hot and dry weather in the northern U.S. Plains and southern Canada’s Prairies, though there are prospects for rain next week. U.S. spring wheat this week was rated just 43% “good” and “excellent.”  
• Some rain relief is expected this weekend, World Weather said, but many areas will remain too dry for an extended period of time, and a drier than usual tendency will prevail in the northern Plains and northern Midwest.
• The USDA’s weekly export sales report today showed new-crop wheat exports at 398,300 MT for the week ended May 27, in the middle of trade estimates. No new Chinese sales were reported.

• Exports of all types of U.S. wheat for the marketing year to date totaled 24.3 million MT, down about 0.8% from the same period a year earlier, USDA data showed.  

Cattle futures were lower at midsession, led by feeder cattle futures.

• August live cattle futures are potentially heading for a close below last week’s settlement of $118.60 per hundredweight amid a softer technical picture, slow cash markets and potential backlog in market-ready animals.
• August live cattle fell as low as $117.875 before recovering. Support is around this week’s low of $114.60 and resistance is around this week’s high at $119.60.
• Cattle slaughter numbers are down from last week, reflecting the Memorial Day holiday and the cyberattack that forced a temporary shutdown at some U.S. JBS plants. About 321,000 head of cattle had been slaughtered this week through yesterday, down from 478,000 during the same period last week, the USDA reported.
• Futures remain generally supported by ongoing strength in beef prices. Beef cutout values averaged $340.55 per hundredweight yesterday, up nearly $10 from the end of last week, according to USDA reports.
• Live steers averaged $119.78 yesterday, up from $119.64 at the end of last week. 
• Net beef sales of 12,600 metric tons (MT) for the week ended May 27 were down 55% from the previous week and 38% from the average for the previous four weeks, the USDA said in its weekly export sales report today. 

Hog futures were mixed at midsession, with nearby contracts showing the most strength.

• Nearby hog futures remain near seven-year highs amid strength in wholesale pork markets.
• Pork cutout values yesterday averaged of $131.52 per hundredweight, up 68% from the end of 2020 and the highest in nearly seven years, according to USDA data.
• On cash hog markets, carcass values yesterday averaged $108.45 per hundredweight, up from $105.32 at the end of last week. 
• Weekly net pork sales were 24,300 MT, down 47% from the prior week and 24% below the four-week average. Sales fell to just 10.4% of week pork production.
• Mexico led the list of buyers, purchasing 13,900 MT but Chinese buying fell to 4,800 MT.