Soybean futures rebounded from Monday’s weakness overnight as USDA’s higher U.S. soybean crop rating was apparently already factored into prices. Renewed hopes for a U.S.-China trade deal may also have boosted futures. Gains have been limited by soyoil price weakness. Corn futures were unable to build further upward momentum overnight in the face of prospects for a record U.S. harvest and wheat futures also remained under pressure from big U.S. grain supplies. Cotton futures have drifted lower in early trade with Dec. falling to a 10-session low.
Corn futures mostly ranged from 1 cent lower to 1/4 cent higher at the end of early trading, with soybean futures mostly 4 1/2 to 7 cents higher, while wheat futures mostly ranged from 3 1/4 cents lower to 2 cents higher. Cotton futures mostly range from 33 to 36 points lower.
In other markets, U.S. crude oil futures are 98 cents to $1.00 lower, retreating from a 3-week high hit on Monday under renewed pressure from concerns about a possible supply glut. The weakness comes despite concerns about disruptions to Russia oil exports amid Ukrainian attacks on Russian infrastructure. Iran on Tuesday said its oil output had reached a 7-1/2 year high.
After rallying on Monday, the dollar index is slightly weaker amid uncertainty about the prospects for a Fed rate cut in September and concerns about the Fed’s independence spurred by President Trump’s unprecedented firing of Fed Governor Lisa Cook. Most-active Dec. gold futures are little changed after giving back earlier gains spurred by the dollar’s weakness and geopolitical concerns.
Based on index futures trade, U.S. stock indexes are set to open slightly lower after falling on Monday amid worries about the Fed’s independence. Asian stock indexes fell in Tuesday trade amid concerns about the Fed. Major European stock indexes are lower in afternoon trade.
U.S. durable goods orders for July came in down 2.8% from June compared with the avg. trade estimate calling for a drop of 4.0%. Investors this morning will be watching data on U.S. home prices for June with the S&P CoreLogic Case-Shiller 20-city index expected to come in up 2.3% from May. The latest U.S. Consumer Confidence Index is also due out, with analysts on avg. expecting a reading of 96.5, down slightly from the July reading of 97.2.
Corn futures were unable to advance further overnight as USDA’s unchanged U.S. corn rating of 71% good/excellent supported prospects for huge production. Dec. futures pushed back above their 40-day moving avg., but again could not stay there. The market will need to close above that avg. at $4.13 to spur further technically-driven short covering. A close above the 40-day moving avg. would set up a possible attempt to fill the downward gap above $4.29 3/4 on the Dec. chart, but a Dec. close back below $4.09 3/4 would be technically worrisome.
Soybean futures started out lower overnight under pressure from USDA’s higher U.S. crop rating of 69% good/ex. but rallied off 3-session lows. Most-active Nov. soybeans traded as low as $10.41 3/4 but finished early trade 11 1/2 cent off that low at $10.53 1/2, which could set the stage for additional short covering this morning.
Support for prices came from reports that China’s top trade negotiator Li Chenggang is expecte to travel to Washington D.C. this week to meet with U.S. officials. There were rumors in the market late last week of interest from Chinese buyers in U.S. soybeans, but hopes for Chinese buying appeared to have faded away on Monday.
Along with prospects for a huge U.S. corn crop to mean abundant supplies this fall, an absence of fresh export news helped cap corn futures strength overnight.
Unusually cool air slipped through the Midwest overnight with 40-degree F. lows southward from Canada to Kentucky. Cool conditions will prevail in the U.S. Midwest and a part of the Great Plains through the next week to possibly 10 days. Rainfall will be limited in the lower and eastern U.S. Midwest through the coming week, although crops will manage the situation relatively well due to the cool temperatures and low demand for moisture.
A Brazilian federal judge has granted an injunction temporarily suspending a decision by the government’s economic competition watchdog, CADE, that ordered grain traders to halt their “soy moratorium” program. In Monday’s decision, the judge sided with Brazilian oilseed crushers lobby, ABIOVE, suspending the watchdog’s decision until a full CADE panel makes its final call on ABIOVE’s appeal.
Winter wheat futures mostly managed small gains in choppy overnight trade, but front-end HRW futures contracts ended the early session slightly lower under continued pressure from abundant supplies. HRW wheat futures had traded to new contract lows overnight, with Dec. HRW falling as low as $5.16 3/4. SRW wheat futures were firmer, holding inside of their Monday price ranges. Dec. SRW ended early trade at $4.31 3/4, with nearby chart support at $5.27 and nearby resistance at $5.35 1/2.
Spring wheat futures came under further pressure overnight from strong harvest activity as U.S. harvest progress advanced to 53% as of Sunday from 36% a week earlier.
Wheat futures trade seems likely to remain choppy this week, with futures taking their cues from the corn price direction to some extent. While SRW wheat futures appear to have bottomed, the upside for prices still looks limited due to ample U.S. wheat and corn supplies and prospects for rising competition in the world export market as estimates of Russia’s 2025 crop rise further.
Moscow-based consultant IKAR has raised its forecast for Russia’s 2025 wheat production to 86.0 MMT from a previous estimate of 85.5 MMT and has raised its forecast for Russia’s 2025-26 wheat exports to 43.0 MMT from 42.5 MMT. The upward revision was due to higher yields in the country’s Central and Volga regions, Dmitry Rylko, head of IKAR told Reuters News Service.
In export news, Jordan is said to have bought 60,000 MT of optional-origin milling wheat in its latest import tender for up to 120,000 MT. Meanwhile, buyers in Thailand are said to be tendering for an estimated 60,000 MT of feed wheat.
Livestock futures may open mixed this morning with cattle futures possibly feeling some further pressure from speculative profit taking. However, strong cash market prospects should remain very supportive for both live cattle and feeder cattle futures. The CME cash feeder index jumped $7.74 on Monday to $357.92. Lean hog futures trade is likely to be choppy, with futures’ discounts to cash spurring speculative bargain hunting and prospects for continued seasonal cash price weakness remaining a negative market factor. Lower-than-expected hog marketings should remain supportive for prices.
