CORN
Corn futures were narrowly mixed overnight. July corn traded a range between 7.55-1/2 and 7.64 and is up 3 cents this morning to 7.62-1/2. Dec is steady at 6.59-1/4. The corn market is starting to receive some seasonal pressure as we are now almost to the month of July and haven’t had a significant weather event. Weather forecasts for the next two weeks look mild with cooler temps and rain coming to areas that need it. Although crop ratings are dropping, the market feels it is still early and forecasts will improve enough to keep that number steady or improved. A Quarterly Grain Stocks and Planted Acreage report will be out at 11 AM CT tomorrow. This is generally one of the more volatile reports of the year. The U.S. trade range for June 1 stocks is 379 mil bu. The trade range for U.S. 2022 corn acres is 2.6 mil acres with an average guess of 89.8 mil vs USDA’s March estimate of 89.5 and 93.3 last year. Meanwhile, Weekly Ethanol Stats will be out today, Exports early tomorrow morning.
SOYBEANS
Soybean futures were up overnight with July gaining 10-1/2 cents to 16.74-1/2 and Nov, 6-1/2 cents to 14.69. August meal was up 5.70 to 425.40. August soy oil was down .04 to 68.96. Soybean meal futures have been consolidating over the $400 per ton level for a number of weeks now. Talk of potential lower soybean acres are keeping support in the market along with the fact that China is lightening up its Covid restrictions. The lighter restrictions could make China a bigger player once again in the global market for commodities. The market will watch Thursday’s USDA report closely to see what the USDA says grain stocks and planted acreage are. The U.S. trade range for June 1 stocks is 360 mil bu vs USDA carryout estimate of 280. The trade range of guesses for U.S. 2022 soybean acres is 3.6 mil acres. The average guess is 90.4 mil vs USDA’s March estimate of 90.9 and 87.2 last year.
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WHEAT
Winter futures were up overnight as the markets try to correct from an oversold condition following Monday’s move to the lowest price levels since late February. Sept Chicago futures gained 15 cents to 9.36-1/4. KC wheat gained 17 cents to 10.07-1/4. Sept MPLS was up a dime to 10.50-3/4. We’ll get Weekly Export numbers tomorrow morning. New tenders from Egypt and Jordan this week follow tenders from Pakistan and Bangladesh as world wheat demand increases with Russia defaults raising questions of their ability to offer wheat for export. Then, USDA will released Quarterly Grain Stocks and Acreage data at 11 AM CT. The average guess for U.S. 2022 wheat acres is 47.0 vs USDA’s March estimate of 47.3 and 46.7 last year.
CATTLE
Cattle futures are called mixed to weaker while drifting lower overall, possibly poised to test the bottom of trading ranges. The heavy supply of front-end cattle will be a limiting factor. The cash market will still be the key for price direction in the near-term. Jun live cattle are in their last week of trade with expiration tomorrow. The contract is trading at a discount to the cash market, which helped bring buying support on the contract. The cash market has been slow to develop this week. Early indications are seeing some light trade in the south at $137, but not enough to establish a trend. Northern trade continues to be firmer in price. The cash market is expected to be steady to lower versus last week’s totals. The front-end supply of heavy weight cattle will stay plentiful, limiting a potential overall cash. Heavy weight cattle are still totaling 1.1% more than last year in this window and a staggering 5.2% more than the 5-year average. Beef carcass cutout values were mixed at midday, and finished the day lower with Choice values losing 1.54 to 267.14 and Select was 1.93 lower to 243.31. The load count was moderate at 152 loads. As the retail demand window moves past the 4th of July holiday, demand may be more of a concern going into the heart of summer. Feeder cattle posted triple digit loses after a firmer tone in the corn market. The cash market in feeders has been supportive, reflecting in the cash index. Feeder Cash Index values were 1.11 to 164.20.
HOGS
Hog market calls are steady to lower. The USDA will release the Quarterly Hogs and Pigs report today after the markets close, which could provide the outlook the market is looking for to break out of this range one way or another. Expectations are for the report to show still tightening hog supplies and limited expansions. Total hogs and pigs as of June 1 is expected to be at 99.3% of last year. If realized, this will be the lowest pig hers in 4 years. Animals kept for breeding at 98.9% of last year, which would be a 5-year low, and Kept for marketing at 99.3% of last year. Futures are in a consolidative pattern, trading between the 100-day and 200-day moving averages on both the July and August charts. This pattern has held since early May, as the market may be looking for a longer-term direction. Cash trade has stayed firm as packers bid up for hog supplies. Direct morning trade was firmer on Tuesday, adding .31 to 114.54, the 5-day average trade to a rolling average price of 117.40. The futures market has been running at a discount to the direct cash trade, supporting prices. The Lean Hog Cash Index traded 0.44 higher to 111.35, reflecting the overall support in the cash market. Demand has been more of a concern, but midday carcass values were higher, but lost that value into the close, finishing 3.56 lower to 105.47 on moderate demand of 322 loads. The soft retail close will pressure prices this morning.
Author
Matt Strelow