CORN

Corn futures are called mixed following two-sided action overnight inside of yesterday’s trading ranges.  Stock index futures and crude, which have been influencing the corn trade to an extent, are also consolidating this morning, but the dollar is up in a bid to make a fresh one-month high.  The corn market has improved technically in the past two sessions, but is still facing huge planted acreage forecasts, good planting progress and demand woes tied to low energy markets and ethanol production.  Talk of China looking to purchase 20 MMT of corn to restock reserve supplies and short covering will keep prices at least sideways 10 to 15 cents above Tuesday’s contract lows.  May options expire today which will create some movement in the nearbys.

SOYBEANS

Soybean futures were choppy overnight after failing to hold onto sizable gains on Thursday as the dollar/Brazilian real spread continues to trend bearish for the oilseed.  Either way, underlying support is occurring as short covering props the market up amid improved Chinese export business and nearby contracts did peak above yesterday’s highs overnight before falling back to unchanged .  USDA reported sales of soybeans to China the past two sessions and talk of China looking for 10 MMT of soybeans to fill reserves should buoy prices into the weekend.  For the week, bean contracts are about even and look to solidifying a bottom on the charts.

WHEAT

Wheat futures were mixed overnight with a steady tone as the trade awaits a tender from Saudi Arabia that will reflect just how competitive U.S. wheat is on the export market.  They’re looking to buy 655,000 tonnes for delivery in July and August, the state-run body said in a statement on Thursday.  The tender deadline is today.  Meanwhile, focus stays honed in on weather in U.S. and Black Sea region and any production issues.  In addition, China’s northern growing region is seeing cold weather that is viewed as supportive.  Chicago wheat contracts have had a narrowing bias on the charts since Monday’s 25 cent trading range, which will reinforce a breakout in either direction once the ‘pennant’ has been completed.

CATTLE

Live cattle futures are called mixed ahead of today’s Cattle on Feed report scheduled for this afternoon after the markets close.  Cumulative beef exports reached the highest level on record for this time of the year going back to at least 2002.  Despite the strong surge in retail carcass values pushing to record high for choice carcasses, the concern about cash markets and the slaughter pace is viewed as barriers to a rally.  Cash trade is softer this week than last week with most trade near $100/cwt.

HOGS

Lean hog futures are called steady to higher on follow-through after contracts posted massive gains on Thursday, closing at, or near their session highs. Processing plant closures remain a going concern about handling the large supply of slaughter-ready hogs.  However, firming retail values and strong year-over-year cumulative export sales, primarily to Mexico, China and Japan support price in an over-sold market that appears to be carving out a bottom on the charts since imploding at the end of March.

Author

Lisa Heder