Corn futures made new highs overnight on follow through buying momentum. July was up a nickel to 4.47, Dec up 3 to 4.58-3/4. Technicals look strong and crop conditions continue to have a big question mark behind them. Excessive rains, cooler temperatures, and expectations for crop ratings to indicate a poor start to the season, along with slow emergence and an expectation that acres will decline on the next USDA report are all viewed as supportive. USDA will release acreage statistics on Friday, June 28. In export news, USDA confirmed private sales of 175,000 tonnes of U.S. corn to Mexico for the 2019/20 marketing year. And, the trade is digesting news that China, the world’s largest consumer of corn after the U.S., is likely to slash state sales of the commodity this year in an effort to halt the rapid depletion of stockpiles that are used to temper food inflation.
Soybean futures traded to 2 to 3 cents higher putting Jul at 8.91 and Nov at 9.18. Beans have been more of a follower, but the forecast and recent planting progress, as well as conditions warrant higher prices. Wet weather in the Eastern belt remains a concern, and now there’s more rain in the forecast for IL, IN, OH and MI in the 7-day forecast that will keep sideline growers. A higher close today would mark a fifth consecutive day of gains.
Wheat futures mostly steady overnight. The technical picture looks stronger than it has in some time and expectations for delay to harvest due to wet weather is supportive. Dry weather elsewhere is the world is also viewed as a plus for the market.
Cattle futures are called mixed. We continue to be bullish at this price level, but the market has failed to make any sort of advance to suggest significant short covering. The period between Memorial Day and the Fourth of July is generally a strong period for beef consumption, but a cool rainy spring has slowed beef demand. In addition, Tuesday’s bullish USDA report for corn makes it likely that prices will remain well above $4/bu and maybe a lot higher this year.
Hog futures are called mixed to higher after becoming technically oversold. Look for volatility to continue, though. Jun is in line with the index, but Jul may be considered overvalued. Oct hogs are holding support this week and should see more some follow-through bounce into the weekend.