CORN

Corn futures were firm overnight as a wave of cold temperatures blanket the upper Midwest causing some freeze concerns for the market, though no widespread damage is anticipated.  The U.S. 2 week Midwest weather forecast looks favorable for crops.  Dec was up 1-1/2 cents to 3.35-1/2 and unchanged for the week.  The confirmed sale of 27 million bu of corn to China and weekly export sales staying firm helped provide buying support in the corn market on Thursday.  Expectations of growing supply and a strong planting pace will limit rallies heading into Tuesday’s May USDA report.  The average trade guess for US 2019/20 corn carryout is near 2,224 mil bu vs 2,092 USDA April estimate;  Average trade guess for US 2020/21 corn carryout is near 3.389 mil bu.

SOYBEANS

Soybean futures were up a nickel overnight and are up 7 cents for the week.  Nov beans have spent the week oscillating around the 8.50 price level with a 15 cent trading range.  Rumors of China looking to purchase U.S. soybeans is providing buying support in the market into the weekend.  Weekly export sales were within expectations which also keeps support in the market.  The planting pace, at record levels and a break to new lows this week in the Brazilian real versus the U.S. dollar act as limiting factors over the top the of the market.  The average trade guess for US 2019/20 soybean carryout in Tuesday’s USDA report is near 488 mil bu vs 480 USDA April estimate;  Average trade guess for US 2020/21 soybean carryout is 430 mil bu.

WHEAT

Wheat futures were mixed overnight while trading 5 cent ranges. Chi July is at 5.20-1/2 and should struggle to get to 5.50 without weather issues.  In addition, open Interest remains near season lows and trade volume is also low.  Cold weather forecasts brought some buying into the wheat market on Thursday, but no damage is expected.  Improved weather in the Black Sea region and Europe should help the development of the wheat crop and keep limits on wheat price rallies.  Looking ahead to Tuesday’s USDA report:  The average trade guess for US 2019/20 wheat carryout is near 968 mil bu vs 970 USDA April estimate;  Average trade guess for US 2020/21 wheat carryout is near 814;  Average trade guess for US 2020 winter wheat crop is 1.245 mil bu vs 1,304 last year, HRW 739 vs 833 and SRW 280 vs 239.

CATTLE

Live cattle futures are called steady to higher.  Limit higher closes in live cattle on Thursday sets up additional follow through and expanded limits, underpinned by strength seen in cash cattle trade.  In addition, the strong retail market and June’s discount to cash is also noted.  June futures left a wide gap on the daily chart in yesterday’s trade.  Look for volatility, though, since futures have moved aggressively higher the past two sessions which could lead to some profit taking going into the weekend.

HOGS

Lean hog futures are called mixed after stalling from their rally this week.  Strong retail values and weekly export sales, as well as the potential for spillover support from cattle should keep a bid under the market.  Beef prices have jumped to record highs 11 sessions in a row. The technical picture has improved, but is showing signs of consolidating off the recent move higher as traders view the record profit margins for packers as plenty of incentive to get processing plants back on-line.  Smithfield Foods confirmed reopening the Sioux Falls, SD plant.

Author

Lisa Heder