CORN

Corn futures are under pressure again today, with July down 0.0325 to 3.165, September corn is down 0.03 to 3.2125 and December corn is down 0.03 to 3.31. Funds are holding a large net short position heading into the summer which could help fuel a bounce, but so far even recovering energy prices cannot spark much in the way of short covering. Rain in parts of the western Corn Belt have helped to ease some dryness concerns, but excess moisture in parts of the eastern Corn Belt may further delay plantings. The US sold 884,200 tonnes of corn for the week ending May 14, down 18% from last week and down 10% from the previous 4-week average. July futures have fallen well below the 10 and 20-day moving average levels, and technical momentum may keep pulling prices lower. Funds were thought to have sold about 4,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are down hard this morning, with July trading 0.1025 lower to 8.3625, August is 0.0925 lower to 8.40 and November is down 0.08 to 8.46. Current USDA data for the 2020 soybean crop would indicate that there is not much weather premium built into the soybean market at this time. However, many traders were calling for higher soybean acres this year due to low corn prices near planting, and excess rains in the eastern Corn Belt lately may pull more acres over to soybeans. The Brazilian real is sharply higher today which makes the pressure on bean prices even more concerning. There are rumors circulating today of further tension between the US and China which is likely the major reason for selling action today. The US sold 1.205 million tonnes of beans for the week ending May 14, up 99% from the previous week and up 80% from the previous 4-week average. July soybeans are trading at their lowest levels this morning since last Thursday, back below their 10 and 20-day moving average support levels. There are a multitude of support levels below soybean prices right now, but key support for the July contract lies at 8.30. Funds were thought to have bought 3,000 contracts of beans yesterday.

WHEAT

Wheat futures are mixed this morning, trading within volatile ranges so far. July CHI wheat is down 0.02 to 5.1575, July KC wheat is down 0.005 to 4.5275 and July MPLS wheat is down 0.0275 to 5.1775. Drier weather in Europe is supportive, though rains in the Plains have pressured the KC wheat futures even after lower yield projections from the Wheat Quality Council crop tour. Both the US dollar and Russian ruble are higher, keeping prices mixed. All three wheat contracts surged higher this morning but have since backed off due to a lower tone for the grains complex. Chi wheat has held nearby support, but the KC and MPLS contracts tested resistance and have fallen back lower. The US sold 175,800 tonnes of wheat for the week ending May 14 , down 14% from last week and down 39% form the previous 4-week average. Funds were thought to have bought about 11,000 contracts of CHI wheat yesterday.

CATTLE

Cattle markets are choppy this morning, with June lives up 0.30 to 98.70, August lives are up 0.25 to 97.87 and October lives are down 0.17 to 99.45. August feeders are down 0.15 to 128.85 and September feeders are up 0.40. Higher slaughter this week has lead once again to higher mid week cash trade. There was trade reported yesterday in multiple states at 120.00, the high end of last week’s range. This could even build through the end of the week to higher prices. Choice beef prices were down hard again yesterday afternoon, but Select values have been rallying which suggests that the higher-priced Choice meat has priced itself out of strong consumer demand. June live cattle are trading in a quiet inside session so far today, and though stochastics are still overbought, they have done a good job of avoiding a sell off. The discount to cash is likely the key, especially as we move closer to delivery month. August feeders are trading in the middle of the day’s range, trying to stem the losses taken yesterday.

HOGS

Hog markets are moderately higher today, with June up 1.92 to 58.80, July is up 1.00 to 56.80 and August is up 0.30. The cash index is lower again today which may indicate that packers are drawing from slaughter supplies that they already own to fill current capacity. Pork values closed higher yesterday afternoon, but were well off the day’s highs. The market does not seem too concerned with rumors that trade relations between the US and China may be further souring. June hogs are testing overhead resistance at the 10, 20 and 50-day moving average levels . Prices have not broken through yet, but a close above should turn the trend higher as futures move to converge with cash. This could also turn the trend for back month contracts that are sharply oversold.

Author

Bryan Doherty