CORN
- Jul corn up 5 @ 7.98
- Dryness in central Brazil is a continued concern for the safrinha corn crop
- Some analysts are reducing Brazil’s corn production by 5-10 mmt (last WASDE was at 114 mmt)
- China is on Golden Week holiday until Thursday so no export activity expected from them
- APK Inform reported Ukraine’s April grain exports at 923,000 mt (of which 768,000 mt was corn) which compares with 2.8 mmt per month before the war
SOYBEANS
- Jul soybeans up 7 @ 16.37
- Higher crude oil is supporting higher soybean oil
- China is expected to purchase more new crop US soybeans after they return from their Golden Week holiday
- Crush margins are still historically high
- Covid lockdowns are still in effect in China which could reduce their import demand
- EU ban on Russian oil could ultimately impact the demand for biofuels
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WHEAT
- Jul wheat up 31 @ 10.76, Jul KC up 29 @ 11.22, & Jul MNPLS up 21 @ 11.77
- India is potentially banning wheat exports, which has wheat sharply higher
- Heat and dryness in India have caused some analysts to reduce their estimates of that crop from 112 mmt to around 100 mmt (India’s government says 105 mmt)
- Canadian wheat stocks are projected by the USDA to be record low by the end of July at 2.9 mmt
- Paris milling wheat futures are sharply higher
- Despite some recent moisture, drought is ongoing in many HRW areas
CATTLE
- Jun LC down 0.300 @ 135.025 & May FC up 0.050 @ 162.450
- Feedlots may be willing to hold out for higher cash with lower corn prices recently
- Packers may be less aggressive with some cattle already contracted ahead
- Live cattle charts still have large gaps above the market
- Choice cuts down 3.00 and select down 0.89
- Cattle slaughter projected at 125K
- CME Feeder Cattle Index for 5/3: up 0.53 @ 155.77
HOGS
- Jun hogs up 2.300 @ 104.500 & Jun pork cutout up 1.175 @ 110.775
- June hogs closed the small chart gap at 101.95
- Futures are oversold and due for a correction
- Stronger cash expected today
- National Direct Afternoon report increased 2.57
- Hog slaughter projected at 480K
- CME Lean Hog Index for 5/4: down 0.44 @ 101.15
Author
Brandon Doherty