CORN

Corn futures were up 3 to 4-1/2 cents overnight challenging Tuesday’s fresh multi-week highs.  Dec corn eclipsed Tuesday’s high of 3.54-1/4 by 1/2 cent overnight.  The surprise on corn planted acres of 92 million vs expectations of 95 million supports follow-through upward price movement as Managed Money fund managers weigh the prospects of being on the wrong side of the market.  Funds bought back an estimated 40,000 corn contracts and are estimated to be net short 243,000.  Tuesday’s rally was limited by larger-than-expected quarterly grain stocks at 5.220 billion bushels.  However, traders may be focused more on putting weather premium into row crops as above average temperatures are forecast into July.  For now, a lengthy band of rain stretching from northern MN down to north/central MO is dispersing from west to east on the radar this morning on the heels of hot and muggy conditions.  See weather updates in the bean summary below.  Markets are closed on Friday, but we’ll get routine demand news in the form of Weekly Ethanol Stats today, Exports tomorrow.

SOYBEANS

Soybean futures are  higher this morning after posting gains of 5 to 6 cents overnight.  Nov beans also eclipsed Tuesday’s new high for the move, getting to 8.87-1/2.  Meal and soyoil were higher, too.  After yesterday’s trade, Managed Money is net long an estimated 53,000 soybean contracts; net short 46,000 lots of soymeal, and; short 4,000 soyoil.  With the historically volatile Quarterly Grain Stocks and Acreage reports in the rear-view mirror, weather is one of the primary focal points for the market into July with forecasts holding warmer-than-normal temps.  Quarterly Grain Stocks were in line with expectations at 1.380 billion bushels, but planted acres were below expectations 83.3 million acres, thus providing support.  Above average temperatures could bring some premium into the soybean market with a relatively tight supply picture. The 11 to 16 day outlook for the Midwest sees ridging occurring bringing below average precipitation to a good portion of the region; temps will be above average but widespread severe heat is just seen in pockets.  The 6 to 10 day forecast for the Midwest has shower and thunderstorm activity mainly confined to Minnesota, Wisconsin, and the Ohio River Valley.  This afternoon’s May crush is estimated to dip to 5.421 million short tons, or 180.7 million bushels.  Overnight, Chinese Ag futures (Sep) settled up 35 yuan, up 1 yuan in Corn, up 51 in soymeal, unchanged in soyoil, and down 56 in Palm Oil.

WHEAT

Wheat futures were 3 to 4 higher in Chicago overnight, 1 to 2 in KC; And, mixed in Mpls.  Strength in row crops sparked some short covering in the wheat markets despite Quarterly Grain Stocks coming in above expectations.  Managed Money is net short an estimated 47,000 SRW wheat contracts.  Look for more of the same unless row crops find some sort of resistance, allowing wheat fundamentals to exert pressure on contracts.  Demand, global wheat prices and trends in the dollar will likely lead the way for U.S. wheat, overall.  In tender activity, Jordan bought 60,000 tons of optional-origin wheat; Algeria bought 300,000 tons of optional-origin wheat; Thailand seeks 236,800 tons of optional-origin feed wheat; And, South Korea bought 60,000 tons of optional-origin feed wheat.

CATTLE

Live cattle futures are called mixed after breaking out to the upside yesterday, only to finish softer.  Cash trade is beginning to develop this week around $93-95/cwt, steady to $2 lower than last week.  Retail values trying to find stability near $208 on Choice trade.  Cattle futures look to stay in consolidation mode and, in the case of feeders, now have the attention of the surging corn market after assuming low feed prices for the past several months, which could pressure prices.

HOGS

Lean hog futures are called steady to higher.  Strength in the corn market helped support deferred lean hog contracts on the thought of overall hog herd expansion could be halted with higher feed grain prices.  Near-term, cash movement and retail values will keep pressure on front month hogs as the market works on getting more current with backed up slaughter supplies.

Author

Matthew Strelow