Corn futures are called mixed to Lower until the release of today’s USDA monthly Supply/Demand report due out at 11 AM CT. Overnight, contracts were down a penny, but still range bound. Corn planting progress is pegged at 67% complete and at a strong pace vs the 5-year average of 56%. This, coupled with decreased demand for ethanol and feed use is keeping pressure on the market as traders square positions for the WASDE report which many believe will be the most bearish report for the corn market in 2020. Expectations are a heavy corn supply with carryout at 2.224 billion bushels for 2019-20 and 3.389 billion for 2020-21.
Soybean futures were flat overnight. Rumors of China purchasing U.S. soybeans for July delivery helped support the market on Monday. We’ll watch for confirmation in the coming days that China bought the 4 cargoes, or 240,000 mt (8.8 mil bu). Prices are consolidating in front of the USDA numbers which are forecast to show a very manageable soybean supply for this year and next. The first estimates for the 2020/21 bean crop will be revealed. Average trade estimates for 2020 production is 4.1 bil bu, up from 3.6 bil in 2019. Estimated 2019/20 U.S. Ending Stocks for soybeans come in around 501 mil bu, up from 480 in April. Meanwhile, the planting pace at 38% for this spring, is well ahead of 5-year average.
Wheat futures traded softer overnight with Chi down 4, KC down 2 to 3; And, Mpls down 1-3/4 cents. World wheat supplies are forecast to stay heavy in today’s USDA report, thus keeping pressure on U.S. wheat prices. The average trade guess for US 2019/20 wheat carryout is near 968 mil bu vs 970 in USDA’s April estimate; Average trade guess for US 2020/21 wheat carryout is near 814; Average trade guess for US 2020 winter wheat crop is 1.245 mil bu vs 1.304 last year, HRW 739 vs 833 and SRW 280 vs 239. Winter wheat conditions dropped 2% to 53% good/excellent, which was slightly below expectations due to dry conditions across portions of the southwestern plains.
Live cattle futures are called steady to lower with the short-term trend teetering on lower following a drop below the 60-day moving average in June live cattle. Live futures experienced profit-taking on Monday after a strong rally in recent weeks. Improved cash trade should stay supportive the market, but further long liquidation is likely given the limit down close on Monday in deferred contracts. Underneath the market, retail values remain at record levels, which should support price and the potential cash markets.
Lean hog futures are called mixed to lower. The technical picture looks weak in the short-term, which could bring some additional long liquidation today. Strong retail values and cash firmness support the front month contracts, and the two-day lean hog index jumped to 67.00 from 66.13, leaving July futures (60.47) at a deep discount. The slaughter pace through large supplies of market-ready hogs is the key in the upcoming weeks.