CORN
Corn futures remained choppy overnight with prices 3 to 5 cents higher while favoring this upper end of the this week’s lower trading ranges. July corn is up 3-1/2 cents to 6.61-3/4. Dec is up 4-1/2 to 5.43-1/2. Trade estimates for this morning’s USDA Weekly Export Sales are a robust 3 to 4.5 mil tons for new crop. Old crop is seen coming in from 400,000 tons to a negative (300,000) tons. Basis bids for corn shipped by barge to the U.S. Gulf Coast and loaded for export were mostly firm on Wednesday, supported by active export loadings of old-crop shipments and strong Chinese demand for new-crop supplies.
Talk that over the next 2 weeks and possibly 30 days of U.S. Midwest weather having normal to above normal temps with normal rains which would support growth may force more weather premium out of futures. Yesterday’s dip to 50-day moving average support for the Dec contract near 5.21 will serve as a bearish target for the trade moving forward. The high this week was at 5.49-3/4 versus the 10 and 20-day moving averages converging up near 5.71. Outside markets are lower this morning with the dollar off 8 basis points, crude down a dollar and stock index futures down 160 points.
SOYBEANS
Soybeans were firm overnight ahead of this morning’s USDA Weekly Export Sales. Futures were up 3 cents to 15.41-1/4 (July) and 13.72-1/4 (Nov). Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 400,000 tons for new crop, negative (200,000) to 200,000 tons for old crop. Soybean basis values are flat to lower on muted demand as tight U.S. supplies and high prices prompted most global buyers to book South American purchases instead. Barges loaded in May were bid 2 cents lower at 68 cents over CBOT July futures, while export premiums for June soybean loadings fell 10 cents to 80 cents over futures. China’s soy imports in May may exceed 10 mil tons due to large arrivals from Brazil, its biggest supplier, the China National Grain and Oils Information Center said in a report overnight. Overnight, Chinese bean futures (SEP 21) were down 146 yuan ; Soymeal down 41; And, Soyoil down 270. Malaysian palm oil prices overnight were down 156 ringgit (-3.50%) at 4301 tracking losses in this week in U.S. soy markets and a slump in Chinese commodities, although optimism for firm shipments and a drop in production underpinned the tropical oil.
WHEAT
Wheat futures were mixed overnight in quiet trade. July CBOT futures are up a penny to 6.80-1/4. KC wheat is down 3-1/2 cents to 6.30-1/4; And, July MPLS is up 4-1/2 to 7.02. All three contracts have tumbled this week in search of their respective 50-day moving average support levels as greener conditions prevail across the countryside including talk of north Kansas 2021 wheat yields are shaping up to be the highest in the 20 year history of the wheat quality tour. Trade estimates for this morning’s USDA Weekly Export Sales are 150,000 to 350,000 tons for new crop. Old crop is seen coming in from 150,000 tons to a negative (75,000) tons.
CATTLE
Cattle futures are called steady to higher. Live cattle finished Wednesday mixed with some buying strength in the front end of the market highlighting bull spreading as weakness occurred in the deferred contracts. The cash market got started for the week at $119/cwt in the south and some northern dressed trade at $191, mostly steady to slightly higher than last week, but still disappointing. June cattle are running a $3.00 premium to cash, and that supports the front end of the market. Wholesale carcasses stay in their uptrend, though posting mild gains on Wednesday, with Choice trading .04 higher to 323.88 and Select was .64 higher to 299.69 at midday today. Movement was light to moderate at 122 loads. The cattle market will be looking to the weekly export sales this morning, and those numbers could lead price direction going into the end of the week. USDA releases the next Cattle on Feed report tomorrow afternoon.
HOGS
Hog calls are mixed for this morning until we see Weekly Export Sales. Last week, sales were soft, but shipments remained strong. Positive numbers could set the tone in the hog futures market through the end of the week. Hog finished mostly lower on Wednesday, with the strongest selling pressure in the deferred contracts. Chinese hog prices have tumbled on the futures market, trading to their lowest point since January. This is adding selling pressure to the deferred contracts. The cash market has softened recently, but the Lean Hog index remains firm, gaining .37 today to 111.79, and running a premium to the June contract. The retail market was strong again at midday and held those gains into the close, with pork carcasses gaining 1.95 to 118.01 on moderate demand of 258 loads. We view the market as futures not yet having reached a top, and sideways to higher trade being the path in the short-term.
Author
Matthew Strelow