CORN
Corn futures continued to trade in active fashion overnight, posting 15 cent trading ranges inside Tuesday’s volatile market. July corn is up 3 cents to 6.91-3/4 and back above its 20 day moving average. Dec is up 5-1/2 to 5.82-1/2,also treading above that contract’s 20-day MA. 95% of the this year’s U.S. corn crop has been planted as of May 30, up 5% from the previous week. The crop was rated a strong 76% good-to-excellent for the 81% emergence. Scattered showers in the Midwest will remain mostly confined to the southern half of the region this week. More showers are needed across the north, which is likely to come next week as an upper-level low moves through. Elsewhere around the globe, dryness continues in central Brazil for the next week, stressing developing to reproductive corn. Moderate showers are expected in southern Brazil this weekend into next week, improving conditions for the crop in Parana and MGDS. Dry conditions in Argentina have favored harvest. Moderate showers are expected across the north late this week and weekend. Scattered showers over South Africa disrupting harvest. Scattered showers favoring developing corn in China. But temperatures below normal will slow growth. Overall favorable weather in Ukraine and Russia for developing corn.
SOYBEANS
The soybean complex is up this morning with July beans 13 cents higher to 15.61-2/3 and Nov at 14.13 on gains of 16 cents. 84% of the this year’s U.S. bean crop has been planted as of May 30, up 9% from the previous week. Technically, prices are consolidating while maintaining an up-trend as a summer’s worth of unknown weather buoys the market following a strong planting season that includes replanting of some acreage. Chinese soybeans were up 96 yuan ; Soymeal up 26; Soyoil up 120; Corn up 27. Malasyian palm oil prices overnight were up 197 ringgit (+5.06%) at 4088 bouncing back as its widening spread to rival soyoil attracted fresh buyers, with investors weighing the tropical oil’s supply situation in second-biggest grower Malaysia. Scattered showers favor developing soybeans in China, but temperatures that are below normal will slow growth. Scattered showers are falling in India ahead of the monsoon, which is currently in southern portions of the country. This will increase soil moisture to allow for planting to begin shortly. Dry conditions in Argentina have helped harvest. Moderate showers are expected across the north late this week and weekend. Scattered showers in the Midwest will remain mostly confined to the southern half of the region this week. More showers are needed across the north, which is likely to come next week as an upper-level low moves through. Favorable conditions are seen in the Delta for developing soybeans.
WHEAT
Winter wheat futures were up 7 to 10 cents overnight led by positive trade in row crops and more strength in spring wheat. July CBOT and KC contracts are at 7.00 and 6.45, respectively, and are trading an ‘inside day’ based on yesterday’s trading ranges. Winter wheat crop ratings came in at 48% G/E versus 47% last week. July MPLS shot higher again overnight with gains of 21-1/2 cents to 7.93 (versus the contract high of 8.07-1/4) as the spring wheat production area is dealing with a mix of abnormally dry to severe drought conditions as planting progress continues. 97% of the crop is planted, up from 94% the previous week. Periods of showers in the Central and Southern Plains have been persistent over the last couple of weeks and continue for the next week as well, benefiting reproductive winter wheat. There are some flooding concerns, however. Winter wheat in Europe is seeing temperatures increase except in the far east and shower chances continuing for the next week. Overall favorable conditions continue through the continent. Wheat in Ukraine has seen favorable showers, but cool temperatures while Russia has seen less shower activity but better temperatures for growth. An upper-level low in the region will continue to produce showers throughout the week, being favorable for developing wheat. Favorable conditions for planting winter wheat and early growth is happening in Australia.
CATTLE
Cattle futures are called flat to weaker amid a difficult start to the week in the front-month contracts. Strong bear spreading led to firmer values in the deferred contracts. Weekend news of a cyberattack on JBS in North America and Australia was causing packing plant line to be idle on Tuesday. In the U.S., JBS idled about 20% of the daily slaughter capacity, backing up a processing system that was already behind schedule. The world’s largest meat producer, has made “significant progress” to resolve the cyberattack that hit its global operations and will have the “vast majority” of its plants operational today. Retail carcasses were unreported at midday, but traded higher on the close. Choice carcasses gained 1.69 to 332.66 and Select was 4.23 higher to 305.13. The load count was light at 50 loads. Strong retail prices should support the market in general. Cash trade was undeveloped to start the week, and direction will be unclear with the plant closures. The Fed Cattle exchange did hold a special sale on Monday, but no trades were confirmed as offer prices failed to meet reserves. Offers were at $116-119 price levels. Cash trade will take time to develop this week. Technically, charts broke down on the JBS news, and the strong gap lower opens the door for further follow through selling.
HOGS
Hog calls are steady to higher amid active buying to start the week. Futures forged new contract highs again on Tuesday as the cash market stays supportive, and the Lean Hog Cash index climbs higher gaining .36 to 113.44. At 113, prices are trading at multi-year highs, but still well off the PEDV highs from 2014 near the 130 levels. Midday prices were reported late yesterday due to packer issues, but finished higher on the afternoon close. Pork carcasses gained .53 to 127.12 on good movement of 344 loads. The hog market is technically strong and fundamentals are still paving a path higher, as the market seeks a top.
Author
Matthew Strelow