Provided by Stewart-Peterson Inc.
CORN
Corn futures rose overnight with Sept up as much as 13-3/4 cents to 6.13-1/2. Dec gained 13 cents to get to 5.98. USDA Weekly Export Sales will be out tomorrow, delayed one day due the markets being closed on the Monday, the Fourth. A drop in Good-to-Excellent weekly crop ratings combined with a technically oversold condition in the market and topping action in the dollar is helping turn the negative tide in the market into the end of this holiday-shortened week of trading. December corn futures had given up 57.00 and 66.50 cents, respectively, in the two previous weeks of trade. Plenty of rain has been falling across the Midwest and beyond to keep the prospects of a solid crop in place, but next week, most of the U.S. Midwest will be warm and dry. USDA will release new US/World supply and demand data on July 12. In outside markets, U.S. stocks are firm. The dollar is weaker. Crude is higher, but near $95. The overnight low was $93. Gold, silver, copper, coffee, sugar, cocoa and cotton are higher.
SOYBEANS
Soybean futures stayed volatile overnight, rebounding more than 30 cents across the board as the complex tries to find support from and oversold technical picture. August beans reached 14.85, up 38-1/2 cents. November futures also rallied 38-1/2 cents to peak at 13.79-1/4. August soymeal gained 11.0 to 426.60, and Aug soy oil reached 60.32 on a gain of 1.76. Last week’s Acreage report pegged soybean acres at 88.3 million, up 1% from last year, but friendly versus expectations. June 1st Quarterly Stocks were up 26% year-over-year, however, at 971 mil bu. According to Bloomberg, Canada’s canola acreage is estimated to be around 21 million, down 6% from last year, as some production areas grapple with less-than-perfect weather.
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WHEAT
Wheat futures jumped up overnight with 30+ cent gains at all three exchanges. Sept Chicago wheat is up 36 cents this morning to 8.40-1/4 while looking to avoid closing lower for a seventh week out of the last eight in which futures lost more than $4 per bushel. The KC contract is up 30 cents to 8.81-1/2. Sept MPLS future are up 30-1/4 cents to 9.16-1/2. 20 year highs in the dollar and weak demand has erased almost all the optimism baked into the market from the Black Sea region conflict. Ukraine’s foreign Minister said there is no deal to open Ukraine wheat and corn exports. In addition, Canada’s crop expectations are growing as is the U.S. Spring wheat crop potential. All wheat planted acreage is expected to reach 47.1 million which would be the fifth lowest number since records began in 1919. Harvest is thought to be 54% complete as of this week, up from the 5-year average of 48%.
CATTLE
Cattle futures are called mixed to higher. Cattle futures recovered on Wednesday after a round of technical selling to start the week. The anticipation of steady to firm cash markets helped move sellers back into the cattle markets. Futures held support levels and price action was strong while closing to the top of the range. This could lead to additional buying support today. The cash market is starting to develop, and the northern market looks to remain strong due to tighter cattle supplies. Early bids are steady to firmer than last week and have been passed on by producers. With cash potentially higher, August futures were a value compared to cash after Tuesday’s weakness. The time frame after the 4th of July is typically a window of weaker demand. Retail values at midday were very strong, and held those gains into the close with Choice gaining 3.39 to 268.05 and Select 3.06 higher to 242.93. The load count was light at 121 midday loads. The overall weakness in grain market, and the strength in live cattle helped support the feeder market. Grain market posted a more positive technical close on Wednesday, and could lead to a recovery rally, which could impact feeder prices in the near-term. The feeder cash market remains supportive on the countryside. The Feeder Cash index was .26 softer to 165.05 and could be a limiting factor to the August feeder contract.
HOGS
Hogs are called steady to higher as the market is pricing in some optimism regarding a demand boost after Germany discovered African Swine fever in part of its hog production region. This may lead to additional export restriction, providing the U.S. exporters more opportunity. The cash market last week looked to be topping, but this week there has been good strength. Futures gapped higher on the open on Wednesday, as the market saw short covering and follow through buying after Tuesday’s firm close. Chinese pork prices have been on the climb in recent sessions, and if U.S. pork values stay as a value, Chinese business could step in as a replacement.
Author
Matt Strelow