CORN

Corn futures were down 1 to 3 cents overnight, unable to build on a potential break-out to the upside in Tuesday’s trade.  Thus, the bear market prices continue to trend in a sideways fashion with Managed Money estimated net short 226,000 corn contracts.  There are some concerns about planting progress in North Dakota that could put a dent into final planted acreage for the year.  This is a seasonal window to see prices potentially move higher, but a huge ending stocks scenario and early planting progress are proving to be formidable barriers to that this year.  It will be interesting to see today’s Weekly Ethanol Stats report to see if there is another uptick in production.  Weekly Export Sales will be out tomorrow.

SOYBEANS

Soybean futures were firm overnight with most contracts moving up 3  cents in tandem with a technical bounce from new contract lows in meal.  Soybeans prices remain in a consolidation price pattern while building a base of support.  We’ll need more positive news for a move out of this trading range.  An improved Chinese demand pace is supportive, but needs more confirmation in terms of export sales.  Look for more two-sided trade as the Brazilian real shows bottoming action and U.S. weather forecasts make their way into the newswires.  Managed Money is estimated to be net long 27,000 soybeans; net short 19,000 lots of soymeal, and; net short 3,000 soyoil.

WHEAT

Wheat futures were down 2 cents overnight as heavy global supplies of wheat limit rallies.  Managed Money is net short 10,000 contracts of SRW wheat.  The technical picture looks weak with prices pushing below the $5.00 price level in July Chicago, and now Sept contracts, leaving the market open to additional long liquidation.  KC wheat is headed lower and is forging fresh 9-week lows.  Improved weather conditions in parts of the winter wheat belt are also a weight on futures.  Crop scouts, organized by the Kansas Wheat Commission are conducting a three-day tour of Kansas hard red winter wheat fields this week.  In overnight tender Activity, Ethiopia bought 600,000 tons of optional-origin wheat;  Jordan passed on 120,000 tons of optional-origin wheat.  Spring wheat contracts are firm this morning while finding support from soggy conditions in North Dakota preventing sowing progress.

CATTLE

Live cattle futures are called steady to firmer.  Cash cattle trade will set the tone for the week triggered by today’s Fed cattle exchange.  June is still at a sizable discount to cash, as well as trailing the Aug live cattle contract.  All in all, futures have rallied back to pre-Covid19 price levels and are now trimming their sideways daily trading ranges awaiting cues from the pipeline at the retail level as consumers seek normalcy.

HOGS

Lean hog futures are called steady to lower.  The market remains weaker on improved slaughter movement and softening retail values.  Though technically oversold, the trend continues to erode in a systematic process that began on May 5 reflecting the record weights and back up of hogs in the country.

Author

Matthew Strelow