CORN
Corn futures rebounded overnight from several down-days of trading. Nearby July corn is up 11 cents to 6.63-1/2, underpinned by strong basis, Dec is up 9 to 5.46-1/4. Arguably, corn prices had become technically overbought after the year-long rally, and then a bit oversold after the recent downward correction leaving the market open to some interest in value buying. Outside market support stems from a steep plunge (36 basis points) to a fresh multi-month low in the dollar and a test of contract highs in crude overnight.
The U.S. corn crop was 80% planted as of Sunday, this was ahead of the five-year average of 68% complete for this week. Corn emerged is 41% vs 20% last week, and 40% a year ago. Forecasts for a potential drier-than-normal summer offers support for new crop. Near term Midwestern forecasts call for scattered showers through Friday in the west with temperatures near to above normal today, and above to well above normal Wednesday, Thursday and Friday. The eastern portion is to see scattered showers through Friday, especially west. Temperatures look to be near to above normal today, above to well above normal Wednesday thru Friday. The 6 to 10 day outlook holds scattered showers Saturday through next Wednesday with temperatures above to well above normal Saturday, Sunday and Monday, above normal Tuesday-Wednesday. Should the rain develop, newly planted crops look to benefit.
SOYBEANS
Soybeans were higher overnight with July up 15 to 16.02-1/2 and Nov up 12 to 14.09. New highs were again posted in soyoil futures. Soybean prices have been on the defensive highlighted by long liquidation after last week’s private estimate of higher final U.S. 2021 row crop acres than the USDA March guess. A drop in the U.S. soybean export pace, lack of new China new crop buying and lower NOPA monthly soybean crush also offered resistance to beans and meal. Soybeans were 61% planted as of Sunday versus the five-year average of 37%, 42% last week, and 51% a year ago. Emergence was 20% vs 10% last week, and 16% a year ago. Chinese Ag futures (SEP 21) Soybeans were down 8 yuan ; Soymeal up 21; Soyoil up 6; Palm oil down 32; Corn down 10 overnight. Malaysian palm oil prices rose 196 ringgit (+4.62%) at 4438, to breach 2008-highs while industry participants anticipate weakening output from second-biggest grower Malaysia.
WHEAT
Wheat futures are higher this morning within a ‘turn-around Tuesday’ climate among row crops. July Chicago and KC contracts are 7 to 10 cents higher to 706.3/4 and 6/.62, respectively. July Mpls spring wheat, which led the wheat complex lower to start the week on improved forecasts for rains across parts of the Canada prairie and U.S. north plains late this week, is up 9 cents to 7.24. Spring wheat planted is 85% complete vs 70% last week, and 57% a year ago. Emergence is at 47% vs 29% last week, and 28% a year ago. Winter wheat was rated 48% G/E vs 49% last week, and 52% a year ago.
CATTLE
Cattle futures calls are mixed after 2-sided, choppy trade, lacking any overall direction in Monday’s session. The live cattle market has consolidated the past couple sessions, but overall price action looks weak. June cattle held above the nearby low from last week, but failed to push past overhead resistance. Cash trade was undeveloped on Monday, and will likely hold off until late in the week. Last week’s totals were mixed in nature, based on the region as most trade was steady to slightly higher than the previous week. The retail carcass values have stayed supportive in the market place. Strong demand and tighter overall supplies have supported the retail market, and the potential for a boost in summer grilling demand may help provide support. Choice carcasses were trading 2.68 higher to 319.62, and Select gained 3.70 to 296.89 on the close. Load count was light at 86 loads. We’ll get a Cattle on Feed report at the end of the week. In the meantime, newswires reported Argentina’s government is limiting exports of beef, a staple in the country, in the latest unorthodox move to try to contain runaway inflation that’s approaching 50% annually.
HOGS
Hog calls are mixed. Hog futures were choppy to start the week as the market failed to get a bid despite the strong surge higher in midday carcass values. Carcasses gained 10.08 to 125.78 at midday, but softened into the close, gaining .87 to 116.57 on 303 loads. June takes over as the new front month with May expiring last week. The retail strength will support the cash market overall, but direct hog cash prices were soft start the week, and the Lean Hog Index slipped a penny to 110.93, still historically high. Weekly slaughter last week was 2,395,000 head with Saturday’s kill, down 13,000 head from last week. The lighter slaughter keeps the supply side of the market light in pork production supporting the price on the retail level. The bigger picture still has hog prices tending higher, but the upward momentum has slowed.
Author
Matthew Strelow