CORN
Corn futures were down hard overnight following widespread weekend rains and an active forecast. Dec corn plunged nearly the 40 cent daily trade limit to 5.70-1/2, where buying interest trimmed losses. Prices fell through 10-day moving average support down to the contract’s 20-day moving average. July corn, dropped as much as 31-1/2 cents to 6.53. The western portion of the Midwest is to remain mostly dry today and tomorrow followed by isolated showers the rest of the week. Temperatures look above normal today, near normal midweek to above normal Thursday. Then, near to below normal Friday. The eastern portion holds isolated showers today . . . mostly dry Tuesday and Wednesday, then isolated showers Thursday, south Friday. Temperatures will vary from near normal to below normal. The 6 to 10 day outlook features more isolated showers Saturday through next Wednesday with temperatures near to below normal moving to above normal. Weekly Export Inspections will be out this morning, as well as updated weather maps and Weekly Crop Condition Ratings after the close.
SOYBEANS
Nov soybean futures tumbled 48-3/4 cents to 13.90 overnight. Nearby July beans hit an overnight low at 14.72-1/4 on losses of 36-1/4 cents. Meal gapped lower, losing $5 per ton; And, soyoil is in the midst of a collapse, trading 300 points lower following a steep decline to close out last week. An active weather pattern produced scattered rains across the U.S., but left many dry parts untouched. This is leading to a volatile start to the week as row crop plant growth hits the next gear. China markets are closed for holiday. Malaysian palm oil prices overnight were down 294 ringgit (-8.03%) at 3369 as soy markets slumped and worries about rising production and weaker Chinese demand further dented sentiment. A friendlier weather forecast for U.S. crops may help solidify a market top with the Fourth of July timeframe on the horizon. U.S. soybean processors likely crushed 2.6% fewer beans in May than they did in the same month a year ago as maintenance downtime at some facilities restricted production, analysts said ahead of tomorrow’s NOPA report. Basis bids for beans shipped by barge to the U.S. Gulf Coast firmed on Friday in thin trade, rebounding after declining earlier in the week due to sluggish demand from exporters, traders said. In other news, President Joe Biden’s administration, under pressure from labor unions and U.S. senators including from his home state of Delaware, is considering ways to provide relief to U.S. oil refiners from biofuel blending mandates, three sources familiar with the matter said. The issue pits two of the administration’s important political constituencies against each other: blue-collar refinery workers and farmers who depend on biofuel mandates to prop up a massive market for corn. It could prompt an about-face for the administration, which had been rolling back former President Donald Trump’s dramatic expansion of waivers for U.S. refiners from the Renewable Fuel Standard.
WHEAT
Wheat futures traded sharply lower overnight with July Chicago down 20-1/4 cents to 6.60-1/2; July KC down 21 cents to 6.17; And, July MPLS down 27-3/4 cents to 7.37. Last night’s price action, while taking cues from direction in row crops, looks to threaten further weakness on the charts from a technical perspective as prices break lower out of a consolidation phase. Much needed rains in the Dakotas combined with firmness in the dollar point to further overhead resistance, particularly ahead of winter wheat harvest. In addition, USDA did increase their estimate of the Russian wheat crop by 1 mmt to 86 mmt last week while the market was expecting a decrease.
CATTLE
Cattle market calls are for firmer trade following short-covering and value buying strength to end last week. Cattle prices closed at their highest levels in nearly a month on Friday. The friendly price action, should lead to more technical buying. Talk of the USDA looking to begin work on strengthening the enforcement of the Packers and Stockyards Act, may be helping trigger some buying optimism. This law was originally designed to protect poultry and hog farmers and cattle ranchers from unfair, deceptive, and anti-competitive practices in the meat markets. The cash market did see trade ranging from $119-121, mostly steady with the previous week, but with June and August at a discount to cash, front month futures stay supported. Packer inquiry into animals has increased as cattle numbers may be getting more current and reducing some of the backlog. A limiting factor may be Friday’s softness in retail values. For the week, Choice carcasses were down 2.30 and Select lost 2.76, as carcasses have trended softer. Feeder cattle finished with gains on the week, and sharp drop in overnight grain prices will support the feeder market on the open. The strength in cattle to close the week was encouraging, but both live and feeder cattle markets failed to push through overhead resistance. Price action early this week will be key.
HOGS
Hog calls are steady to lower. The weekly chart looks concerning for July hogs with a weekly topping signal. June hogs expire on today, which may have accounted for last week’s choppy action as traders adjusted positions before contract expiration. The cash market has been strong this week, and the lean hog index traded an additional 1.20 today to 119.91, trying to catch the June contract. For the week, the index was 5.86 higher, reflecting the strong cash market. Pork carcasses surged higher at midday Friday, but failed to hold those gains, ending the day 1.51 lower. Carcasses held firm during the week, as prices stayed around the $134.00 level. The slowing retail values could pressure hog prices. We view the markets staying fundamentally supported, though some contracts have consolidated and softened. This market is still looking for a top, but the overall momentum has slowed, and the market exhibit caution this week.
Author
Matthew Strelow