CORN
Corn futures were firm overnight after an abrupt fall from springtime highs. July futures were up 3 cents to 7.34-1/4 while staying at the lower end of Tuesday’s 35-3/4 cent trading range. Dec was up 2-1/2 to 6.94. On Wednesday, Managed funds were net sellers of 22,000 corn and are now estimated to be net long 236,000 contracts. Since May 23, funds have sold 70,000 corn contracts. Weekly Export Sales, normally released on Thursday mornings, are delayed until tomorrow due to the markets being closed on Monday of this week. Weekly Ethanol Stats will be out today. Output and stockpile projections for the week ending May 27 show production seen higher than last week at 1.017 mil barrels per day; Stockpile average estimate is 23.754 mil bbl vs 23.712 mil a week ago.
SOYBEANS
The soy complex was firm overnight with July beans up 9 cents to 16.99-1/4, Nov up 6 to 15.21-1/4, July meal up 2.00 to 414.70 and July soy oil up .40 to 78.51. On Wednesday, Managed funds were net sellers of 2,000 soymeal and bought 4,000 soybeans and 2,000 soy oil. Overnight, Chinese Sept bean futures were up 46 yuan; Soymeal down 10; Soy oil up 36; Palm oil up 130; Corn down 20 — Malaysian palm oil prices overnight were up 109 ringgit (+1.71%) at 6465. USDA announced a 132 metric ton sale of U.S. soybeans to China mid-week, and there were reports that China also bought 2 cargos from Brazil and 1 from Argentina for July and 2 U.S. PNW for Aug/Sep. Argentina soybean harvest is done. China will sell 500 mt soybean reserves on June 10. Indonesia announced they have issued 160 palm oil export permits to 18 companies for 180 mt of exports. Basis bids for soybeans shipped by barge to the U.S. Gulf Coast declined on Wednesday, resuming last week’s softer trend in thin trade despite news of fresh export sales to China, traders said.
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WHEAT
Wheat futures saw a technical bounce overnight, gaining 14 cents in the July Chicago contract to 10.55-1/4. Since May 23, funds have sold 49,000 wheat contracts are are net short an estimated 17,000 contracts. July KC wheat was up 17 cents last night to 11.45-1/4. Both contracts experienced a price drop to below 50-day Moving Average support, so far this week. July MPLS wheat gained 11 cents to 12.08 after challenging its 50-day MA support line on the chart. U.S. weekly exports remain slow because U.S. wheat prices are still not competitive to buyers, particularly with where the elevated dollar is trading. Egypt bought 465 mt of wheat including from Russia. The trade is still waiting on news if Russia will allow Ukrainian exports. Ukraine’s wheat crop is estimated near 20 mmt with 10 mmt available for export.
CATTLE
Cattle futures are called mixed to higher following Wednesday’s gains led by short covering and value buying fueled by corn market weakness. Cattle future may be looking to establish a seasonal low, but cash trade is starting to develop with Southern deals at $135, down $2 from last week. Northern trade is still building. Regional cash trade on $140+ is being noted by regional packers. Retail values were firmer at midday, but finished the day mixed with Choice dropping .12 to 267.42, and Select .26 higher to 248.91. The load count was moderate at 146 loads. Feeders saw a strong price recovery while posting triple digit gains on Wednesday amid weaker corn and wheat markets. August feeders are holding a large premium to the Feeder Cash Index, which could limit near-term gains. The Feeder Cash Index gained .14 to 153.36 on Wednesday.
HOGS
Hog futures are called steady to higher. After a negative tone to start the week, buyers returned on Wednesday and boosted hog prices to their highest close in a month. Retail and cash market fundamentals support, and that has helped bring money flow. The most actively traded July hog contract touched limit higher during the day on Wednesday. With the strong close, the July futures closed back above the 100-day moving average, opening the door for additional upside potential. The 50-day will be the next level of support at 113.500, but a break there could open to challenge trend line resistance near $118.000. The cash market has been supportive under futures. Midday direct trade was 3.80 higher with the weighted average price at 112.89 on Wednesday, and the 5-day average moved lower to 111.09. The CME Lean Hog Index is reflecting the higher cash tone overall and gained 0.22 to 105.15. The June contract is limited by its premium to the cash market, trading at $4.650 premium on Wednesday. Demand faces a slower period after the Memorial Day holiday, but pork carcasses have been firmer to start the week. Retail values closed higher on Wednesday, with carcass values gaining 2.31 to 110.02. Movement was good at 293 loads. The CME Pork Cutout Index gained .23 to 107.47.
Author
Matt Strelow