CORN

Corn futures are showing some impressive gains so far this morning, with July up 0.05 to 3.255, September is up 0.04 to 3.2925 and December is up 0.0375 to 3.3825. Weather forecasts for most of the Corn Belt are showing hot and dry conditions over the next two weeks. This may stress crops in the western part of the Corn Belt where rain coverage over the past week or so has been spotty. Parts of Illinois and Indiana are too wet, and some replant may be in the cards. Energy prices are mixed to lower which makes the mid morning strength in corn even more impressive. As of last Tuesday, funds were holding a net short position of over 245,000 contracts. Especially going into the summer, this is exceptionally heavy and we may be witnessing a bit of a short covering bounce. July futures are trading at their highest level this morning since April 24 and have pushed through their upper Bollinger Band resistance level. Funds were thought to have bought about 4,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are moderately lower this morning after another round of unsuccessful tests of overhead resistance overnight. July beans are down 0.07 to 8.415, August beans are down 0.0625 to 8.44 and November beans are down 0.0525 to 8.5025. Hot and dry forecasts for the next two weeks are not helping the soybean market gain much traction. The Brazilian real is setting back today after trading at its highest level this morning since April 17.  There were reports this morning that China has purchased nearly 600,000 tonnes of Brazilian beans this week which is causing much of the selling action today. July soybeans are currently making a bearish key reversal after not breaking through the 50-day moving average resistance level overnight. A close above the 10 and 20-day moving average levels would limit technical damage. Funds were thought to have bought about 2,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are higher this morning, finding some overflow support from corn buying. July CHI wheat is up 0.04 to 5.085, July KC wheat is up 0.06 to 4.5775 and July MPLS wheat is up 0.02 to 5.1575. Dry weather for the Plains over the next two weeks will likely not do much damage to the wheat crops due to plentiful soil moisture. Eastern Europe and the Black Sea region have received rainfall lately as well which has helped alleviate dryness concerns. Russia has been selling wheat at a good clip again, after news broke that they had not met their quarterly quota as was previously reported.July CHI wheat is currently pushing through the 20-day moving average resistance level after an early test of the 10-day moving average support level. KC futures are showing very similar price action and the MPLS market is currently testing its 50-day moving average support level. A close above that level for spring wheat would be the first since March 31. Funds were thought to have sold about 2,000 contracts of CHI wheat yesterday.

CATTLE

Cattle markets are mixed to mostly lower this morning. June live cattle are 0.17 higher to 100.97, August live cattle are down 0.20 to 100.52 and October lives are down 0.57 to 102.27. August feeders are down 0.02 to 134.00 and September feeders are down 0.17 to 134.90. Cash cattle trade has been choppy so far this week and has not given the futures market much direction. Beef prices are continuing their slide lower as prices stifle demand and beef production increases. Brazil is struggling with widespread coronavirus outbreaks which are likely to disrupt beef production and shipping logistics. June live cattle are trading in a very tight range so far today after yesterday’s break above the 100-day moving average resistance level. August feeders mare making an inside session so far, likely waiting for direction from the live cattle and cash cattle markets.

HOGS

Hog markets are sharply lower this morning, making new gaps and accelerating as the session goes on. June lives are down 2.75 to 57.40, July hogs are down 3.47 to 55.82 and August hogs are down 2.97 to 54.62. The Index is higher for the first time since May 15, and if the trend can continue, this should support the June futures through delivery month. Carcass cutouts have been dropping very quickly lately, down 27% from their May 11 high. Packers are killing more and more hogs as the weeks progress, but margins are tightening. June hogs could not hold support at yesterdays close and gapped lower this morning. June is currently trading below the 10-day moving average support level, and a close below would be the first since May 20.

Author

Bryan Doherty