Provided by Stewart-Peterson Inc.
Corn futures were firm overnight with Sept up 4 to 5.98 and Dec up 2 to 5.88-1/2 as many markets bide time ahead of CPI data today, which is expected gauge inflation at a 40 year high. Pollination is key to the final development of this year’s corn crop and hotter and drier weather in the corn belt may harm yields in certain areas. With the July monthly S/D report in the rearview, look for weather to buoy the market as traders deal with strength in the dollar and a pull back in crude. Speculation on small changes in the weather forecast will dominate trading prices. The corn trade gave back most of the last four-day rally on Tuesday as the September contract was down 43 cents to $5.94 per bushel amid a negative reaction to the USDA Supply and Demand report that showed 2021/22 and 2022/23 corn carryout above market expectations. Weekly Ethanol Stats will be out today, Exports tomorrow. U.S. stocks and crude are firm this morning. Gold, copper, coffee, cocoa and sugar are higher. Silver and cotton are lower.
Soybean futures traded two-sided last night. Aug beans are down a penny this morning to 14.67-1/4. Nov beans are down a nickel to 13.37-1/2. August soybean meal futures are up 1.50 to 426.30 after tumbling $8.10 to 424.80 per ton yesterday. This puts the contract right back in the consolidation range that bean meal has been trading in for a few months now. The next 3 weeks key to final yield. Yesterday, the noon GFS weather map added rains for the central U.S. Midwest. Current EU and GFS models are dry through July 23. Recent rains have improved crops in MN, IA, IN. SW Midwest and the west delta remain warm and dry. EU weather is also dry. Normally, South America does not have 4 bad weather years in a row. Still, Argentina is dry.
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Wheat futures are up a nickel across the board this morning, putting the Sept Chicago, KC and MPLS contracts at 8.19-1/4, 8.72-3/4 and 9.23-3/4, respectively. All three contracts remain below their 200-day Moving Averages while consolidating recent price declines. Tuesday’s USDA report kept prices under wrap yesterday, as well as the headwinds from the higher dollar. The agency basically gave the trade what it expected, Still some feel they are too high in World wheat supplies and too low in demand. Look for choppy trade today as the trade adjusts from a volatile performance in the wheat complex. The UN, Ukraine and Russia are holding talks today to discuss Ukraine exports.
Cattle futures are called mixed to higher after more market strength on Tuesday. August live cattle remain discounted to the cash market, but look to be narrowing the difference which could lead to some support in the spot month. A higher cutout will help asking prices in the cash market. The export market will need to provide underlying support, though in the face of a steep rise in the greenback that threatens our beef exports by increasing the cost for importers. Basis levels are falling in the south and some feedlots are switching to wheat.
Hogs are called mixed as prices contend with lighter volume trading. Higher pork cutouts values bode well for the bulls, as well as hot weather, which might alleviate animal weights. Technical strength is noted, but arguably, prices are in overbought territory which could lead to some selling pressure when buying interest dries up. August hogs, at 109.00 traded an ‘inside day’ yesterday and look to stay choppy between 100-day Moving Average resistance and 50-day MA support. The areas of resistance lie around 109.80 and an upside target of 110.30. Support for the contract is seen at 108.20, then 107.05.