GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 11 to 13 cents higher.
Wheat: SRW 15 to 18 cents higher; HRW 13 to 15 cents higher; HRS 12 to 14 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each rebounded from Tuesday’s selling pressure, with wheat leading the way higher overnight. A softer CPI report led risk assets higher this morning, bringing with it lower interest rates and a weaker dollar. Front-month crude oil futures are trading modestly weaker and on recent lows while the U.S. dollar index is trading nearly 500 points lower.
The Bureau of Labor Statistics released their monthly Consumer Price Index (CPI) this morning. Inflation eased to 3.4% in April, down from 3.5% in March, which was the highest reading since September. The reading was in-line with market expectations. Shelter and gasoline were the largest contributors to the increase in consumer costs. Core inflation slowed to 3.6% annually, the lowest reading since April 2021 and below 3.8% in March.
On Day 1 of the Wheat Quality Council’s HRW wheat tour, scouts found an average yield of 49.9 bu. per acre on samples taken from central and northern Kansas, up from 29.8 bu. per acre along the same routes last year and the five-year (2018-23; no tour in 2020) average of 42.7 bu. per acre. Scouts reported varied conditions and yield potential from the fields sampled. There was a prevalence of stripe rust, but concerns over drought outweighed those worries. Scouts will sample fields in western and southern Kansas today on routes from Colby to Wichita.
The National Oilseed Processors Association (NOPA) is expected to report its members crushed 183.1 million bu. of soybeans during April. That would be down 6.8% from the all-time record of 196.4 million bu. in March and the smallest monthly figure since September. But it would be up 5.7% from year-ago and a record for the month. Soyoil stocks are expected to total 1.882 billion pounds.
House Ag Committee Chair Glenn “GT” Thompson (R-Pa.) and Senate Ag Chair Debbie Stabenow (D-Mich.) met to discuss the upcoming farm bill, with a House committee markup scheduled for May 23. Thompson expressed a commitment to resolving differences between the House and Senate versions of the bill, emphasizing the need for significant funding beyond the $5 billion identified by Stabenow. Additionally, House Ag Committee Democrats are set to meet with Stabenow and House Minority Leader Hakeem Jeffries (D-N.Y.) to discuss the bill and potentially support the Senate’s version. If Democrats vote in unison against the House farm bill approach they will use their consistent arguments regarding food stamp/Thrifty Food Plan and conservation program funding.
Black Sea consulting firm SovEcon cut its Russian wheat crop estimate to 85.7 MMT, down 3.9 MMT from its prior outlook due to recent frost damage.
USDA reported daily export sales of 180,000 MT of soybeans for delivery to unknown destinations. Of the total, 120,000 is slated for delivery during the 2023-24 marketing year, with the remaining 60,000 MT for delivery during 2024-25.
CORN: July corn futures posted gains overnight. Bulls are seeking to overcome resistance at $4.72 1/2, the for-the-move high close, which is reinforced by $4.75 1/2. Initial support comes in at $4.67 1/2 and is reinforced by the 10-day moving average at $4.63 1/4.
SOYBEANS: July soybean futures posted gains overnight, though initial resistance at the 100-day moving average at $12.22 1/4 continues to limit gains. Further buying finds resistance at $12.28 1/4 then $12.36 3/4. Meanwhile, the 10-day moving average offers initial support at $12.14 1/4 and is reinforced by support at $12.05 1/4.
WHEAT: July SRW futures rebounded from Tuesday’s losses overnight. Initial resistance stems from Tuesday’s high of $6.96 and is quickly backed by $7.00, then $7.10 1/4. A resurgence in selling pressure finds support at $6.75 and is backed by $6.67 3/4 then the 10-day moving average at $6.54.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open higher on support from building wholesale price and technical strength seen early this week. As expected, cash cattle trade has had a slow start to the week at steady prices. Meanwhile, the wholesale market has surged higher on robust movement. Choice cutout jumped $5.44 to $304.39 while Select leapt $6.64 higher to $293.82 on Tuesday, the highest marks since April 2 and April 12, respectively. Movement has totaled 234 loads so far this week, indicating strong retailer demand is fueling the surge in cutout prices.
HOGS: Lean hog futures are expected to open with a mostly weaker tone as prices continue to consolidate near recent lows. June lean hog futures have traded around the $98.50 mark for seven consecutive sessions, garnering little momentum either above or below that level. The CME lean hog index has relatively stagnated as well, most recently quoted up 7 cents to $91.29 as of May 13, continuing to hold just below the seasonal peak in late April. Wholesale pork prices were 93 cents lower to $101.51 Tuesday, with losses in bellies, butts and loins offsetting strong gains in ribs.