CORN
Corn futures started the overnight session lower and continued to slide to double-digit losses by this morning. July corn is down cents to 6.47-1/2. Dec is down 15 cents to 5.31-1/2 while finding support above the 50-day moving average located at 5.24-1/4. Corn prices, arguably have fallen back to a fairly key support area from an overbought condition, so fresh bullish news will be needed to return price action to the upside. Chinese demand for U.S. corn supplies provides underlying support. Total Chinese corn purchases for the month of May are already more than 420 mil bu of new crop corn. However, for now, damp weather conditions are acting like a wet blanket over the top of the bull market in row crops. Weekly Export Inspections and Crop Condition Ratings will be out today. U.S. corn planting should come in near 92% complete versus 80% average. Outside markets feature weakness in the dollar, a $1.27 jump in crude and 145 point gain in stock index futures.
SOYBEANS
Soybean futures were down overnight with July off 12 cents to 15.14-1/4 this morning, above the overnight low of 15.06-1/4. Nov beans are down 17 to 13.43-1/2 versus the overnight low of 13.41. Meal and soyoil prices are also lower. Chinese Ag futures (SEP 21) Soybeans down 56 yuan ; Soymeal down 22; Soyoil down 186; Palm oil down 214; Corn down 24. Malaysian palm oil prices overnight were down 92 ringgit (-2.31%) at 3899 nearing its lowest settlement in three weeks, dragged down by soybean oil and amid concerns that lockdowns in India to halt the spread of Covid-19 are weakening demand. The July soybean meal futures contract finished last week at its lowest level since March 22nd. Beans, wheat and corn are showing signs of being sensitive to weather as conditions conducive to a healthy crop unfold into the final week of May. Off-again, on-again showers with moderate temperatures look to prevail much of this week for the many areas of the corn belt. Most estimate U.S. soybean plantings near 80% versus the 54% average.
WHEAT
Winter wheat futures fell to new lows overnight for their recent downward price move, pressured, in part by the sell-off in row crops. July CBOT wheat shed 16-1/2 cents to get to 6.37-3/4. KC wheat is down 14-1/2 cents to 6.09-1/2. July MPLS is off 11 to 6.89-1/2. The Kansas wheat tour ended last week with a record yield estimate of 58.10 bushels per acre, thus weighing on price. Kansas production is expected to be 365 mb versus 281 mb last year. France’s wheat was last rated 79% good-to-excellent. Ukrainian wheat export prices have reversed its trend direction, having lost $6 per ton over the past week thanks to improved crop forecasts in key production regions, the APK-Inform agriculture consultancy said on Saturday.
CATTLE
Cattle futures are called mixed. USDA release the May Cattle on Feed numbers on Friday afternoon. Total cattle on feed as of May 1st was 105% of last year, Placements at 127%, and Marketing at 133% of last year. The total cattle on Feed was above expectations, but within the range. It is difficult to compare back to last year due to the COVID issues, so looking back to 2019, cattle numbers are slightly lower, but not as much as expected at 11.7 million head. The concerning number was the placement at 127%. Regardless, this number was heavy, and could weigh on prices during today’s session. Live cattle futures finished higher to end the week, as the market saw some squaring of positions before the Cattle on Feed report on Friday afternoon. The past week, prices were mostly range-bound working higher, but consolidating versus the previous week. Retail demand is supporting prices, but the market may get cautious if we are through the early summer buying, with Memorial day here, any carcass weakness will pressure cattle prices.
HOGS
Hog calls are higher. Futures ended the week with strong gains as front month prices broke out to the upside on Friday. The technical picture looks strong in the hog market with the move higher into the end of the week. Today’s trade will feature the start of expanded limits due to July closing limit higher on Friday. The cash market has slowed its climb, but still historically high. The Lean hog index was soft on Friday, down .18 to 111.44, but still .50 higher on the week. This was the 16th consecutive week of gains in the index. The index is trading at a discount to the June futures, and that could limit the upside of the front month. Strength in the retail market helped fuel the buying optimism. Pork carcasses were strong at midday Friday gaining 3.03 to 122.25. The $122.25 level set a new all-time high for pork carcasses, pushing through the levels set last year during the COVID issues. Prices softened into the close, but still held gains, up 1.64 to 120.86, falling just short of all-time carcass price highs.
Author
Matthew Strelow