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Soybean, Wheat Futures Rally; Crop Ratings Mixed

CORN COMMENTS

NO NEW RECOMMENDATIONS

Corn futures finished a choppy trading session 1/2 cent lower to 3 1/4 cents higher recovering from early weakness on support from strength in wheat and soybean futures and position evening ahead of this afternoon’s weekly USDA Crop Progress report. A report top U.S. export customer Mexico will no longer seek self-sufficiency in yellow corn production may also have underpinned prices. Favorable Midwest weather forecasts and Friday’s USDA reports continued to weigh on corn futures. July corn futures rose 1 cent to $3.98 1/4, while Sep. futures fell 1/2 cent to $4.07 and Dec. futures fell 1/4 cent to $4.20 1/2.

Today’s relatively firm close suggests the market may now have found at least a temporary low as we go into the July 4 holiday, but it’s difficult to see much upside for prices with the crop in good shape across the majority of the Corn Belt and no major weather threats in sight. Dec. corn has nearby chart support at $4.12-$4.14 3/4, with nearby resistance at $4.23 1/4 and Friday’s high of $4.41.

USDA this afternoon rated U.S. corn condition 67% good/excellent as of Sunday down from 69% a week earlier and 1 percentage point below the avg. of trade expectations but still well above the year-earlier rating of 51%. USDA estimated that 11% of the crop was silking compared with 7% a year earlier and the 5-yr. avg. of only 6%. The crop rating may offer some support for corn futures, but traders will still likely continue to focus primarily on weather forecasts.

Looking at the top corn growing states, the good/ex. rating for the Iowa crop fell 4 percentage points to 73%, while the Illinois good/ex. rating rose 3 points to 65%. The Minnesota crop rating slipped to 62% good/ex. from 65% a week earlier, while the Nebraska good/ex. rating came in at 80% down 2 points from last week. Crop conditions improved in the eastern Corn Belt, with Indiana crop conditions rated 65% good/ex., up from 63% a week earlier.

USDA this afternoon in its monthly Grain Crushings and Co-Products Production report pegged May corn-for-ethanol use at 453.68 mil. bu., up 7.4% from April and 3.3% from May 2023 use of 439.01 mil. bushels.

Mexico’s incoming government will not continue to pursue a core goal of outgoing President Andres Manuel Lopez Obrador to reduce imports of yellow corn and achieve self-sufficiency in production of the grain, the incoming agriculture minister told Reuters News Service today.

Central Illinois corn processor spot basis bids now range from 20 cents under Sep. futures to 10 over, according to USDA. CIF basis bids for delivery of corn to the U.S. Gulf are stronger vs. Friday afternoon. The bid for July delivery is 2 cents stronger at 57 over, while the bid for August delivery is 1 cent weaker at 53 over Sep. futures and the bid for September delivery is at 59 over.

SOYBEAN COMMENTS

NO NEW RECOMMENDATIONS

Soybean futures rallied by 7 to 12 1/2 cents on support from sharp gains in soyoil futures, technically-driven short covering and position evening ahead of this afternoon’s Crop Progress report and the July 4 holiday. Gains were capped by favorable Midwest weather forecasts and ample old-crop stocks. Nearby July soybeans rose 9 cents to $11.59 1/2, while Aug. futures rose 12 1/2 cents to $11.46 and Nov. futures fell rose 7 cents to $11.11. Dec. soyoil futures rose 196 points to 45.75 cents, while Dec. soymeal futures fell $2.90 to $332.60.

Soybean futures put in a technically firm close as they settled near their session highs after earlier charting new long-term lows. Nov. futures now have nearby chart support at $10.97, with nearby resistance at $11.13 and Friday’s high of $11.25. A Nov. close above Friday’s high would constitute a buy signal. Oversold market conditions may spur further short covering as traders even positions ahead of the July 4 holiday.

USDA this afternoon pegged U.S. soybean conditions at 67% good/excellent as of Sunday, unchanged from a week earlier, 1 percentage point above the avg. of trade expectations and well above the year-earlier rating of 50%. USDA estimated that 20% of the crop was blooming, on par with a year earlier and 5 points above the 5-yr. average.

Looking at the top producing states, the good/ex. rating for the Iowa crop slipped by 2 points to 72%, while the good/ex. rating in Illinois rose by 5 points to 64%. The Minnesota good/ex. rating fell by 4 points to 62%, while the Nebraska good/ex. rating came in at 78% down 1 point. The Indiana good/ex. rating was up 3 points to 64%.

USDA in its monthly Fats and Oils report pegged the May U.S. soybean crush at 191.99 mil. bu., up 8% from April and up 1.4% from the May 2023 crush of 189.30 mil. bushels, but below the avg. of trade estimates at 193.85 million. U.S. May 31 soyoil stocks came in at 2.187 bil. lbs. down from 2.311 bil. lbs. at the end of April and down 8.3% from 2.386 bil. lbs. at the end of May 2023. Stocks were also below the avg. of trade estimate at 2.214 bil. pounds.

Central Illinois spot processor soybean basis bids are steady, ranging from 5 cents over July futures to 26 over, according to USDA. CIF basis bids for delivery of soybeans to the Gulf are mostly steady vs. Friday afternoon. The bid for July delivery is steady at 62 over and the bid for August delivery is steady at 65 over Aug. futures, with the bid for Sep. delivery at 60 over Nov. futures.

WHEAT COMMENTS

NO NEW RECOMMENDATIONS

After a mixed overnight session, wheat futures took off to the upside on this morning’s reopen and wound up posting strong gains of 12 to 19 1/4 cents on support from technically-driven short covering and position evening. Futures shook off ongoing pressure from U.S. winter wheat harvest and falling Russian export prices. Most-active Sep. SRW wheat futures rose 16 3/4 cents to $5.90 1/4, while Sep. HRW wheat futures rose 13 1/4 cents to $5.99 1/2 and Sep. spring wheat futures rose 19 1/4 cents to $6.32 1/4.

The wheat futures market is now looking very much like one that has put in significant price lows, although there was no fundamental news behind today’s strength. Most-active Sep. SRW wheat futures posted their highest close in 8 sessions and now have nearby resistance at $6.00 to about $6.04 where their 18-day moving avg. sits. A simple 50% retracement of the recent downward move would take the market back to $6.48.

Sep. HRW wheat futures have established solid support at $5.76 1/4-$5.78 and posted their highest close in 8 sessions at $5.99 1/2. A Sep. HRW wheat breakout above $6.00 could open further near-term upside to $6.20-$6.25. A 50% retracement of the recent down move would take the market to about $6.68.

U.S. winter wheat harvest continues to move at a fast pace, reaching 54% complete as of Sunday, on par with trade expectations and up from 40% a week earlier and the 5-yr. avg. of 39%. The Kansas harvest reached 80% complete, up from 53% a week earlier and the 5-yr. avg. pace of 49%. The Oklahoma harvest is now complete. Harvest is just getting underway in the northern half of the HRW wheat belt with Nebraska progress at 13% vs. an avg. pace of 5%.

USDA rated U.S. spring wheat conditions at 72% good/ex. as of Sunday, up 1 percentage point from a week earlier and 23 points from a year earlier. The rating was also 2 points above the avg. of trade expectations. N. Dakota crop conditions were rated 78% good/ex. up from 72% a week earlier. The strong crop rating may put some fresh fundamental pressure on wheat futures.

COTTON AND RICE COMMENTS

NO NEW RECOMMENDATIONS

Cotton futures bounced 26 to 41 points today on apparent support from short covering, shaking off pressure from Friday’s bearish Crop Acreage report on apparent support from forecasts for hot, weather and limited rainfall across the U.S. cotton belt. Dec cotton futures traded inside the lower half of their Friday price range and finished just above midrange for the session. The market now has nearby support at 72.07-72.19, with nearby resistance at 73.55

Cotton futures may find some further support from this afternoon’s crop condition ratings as USDA rated U.S. cotton conditions 50% good/excellent down from 56% a week earlier, although still above the year-earlier rating of 48%. The good/ex. rating for the Texas crop fell 5 percentage points to 44%, while the Georgia crop rating slid 10 points to 49% good/excellent. USDA estimated 43% of the U.S. crop was squaring vs. a 5-yr. avg. of 38%, with 11% setting bolls vs. an avg. pace of 9%.

Rough rice futures settled 1 cent to 27.5 cents lower with most-active Sep. futures weakest under pressure from technically-driven selling and favorable U.S. crop prospects. Sep. rice futures posted their lowest close in more than 2 months after falling through chart support at their June lows. This afternoon’s USDA crop ratings are unlikely to help the market much as U.S. rice crop conditions were rated 82% good/excellent as of Sunday, down a modest 1 percentage point from a week earlier. Conditions remained above the year-earlier level of 70%. The Arkansas crop was rated 78% good/ex., down from 82% a week earlier.

LIVESTOCK COMMENTS

NO NEW RECOMMENDATIONS

Lean hog futures could not hold early strength and wound up sliding anywhere from 38 cents to $1.63 under pressure from ample hog supplies and a soft cash market tone. Most-active Aug. futures fell $1.33 to $88.18, while Oct. futures dropped $1.63 to $74.10. The lagging CME lean hog index was down 28 cents to $89.47 and is expected to fall another 30 cents on Tuesday.

Aug. lean hog futures finished near their session low and $3.00 off of an 8-session high of $91.18 they charted this morning. The market narrowly missed charting a bearish outside day down and charted a large bearish hook reversal. Nearby chart support is at $87.60 and last week’s low of $86.23. Oct. lean hogs posted a large outside day down off of a 6-session high of $76.60 after failing at their 18-day moving avg. and now are set to test last week’s bullish reversal low at $73.98.

The composite pork cutout fell $2.48 today, erasing most of Friday’s gain, with all cutout components weaker. The midafternoon national avg. negotiated cash carcass price was 43 cents weaker at $88.74. Today’s hog slaughter ran 477,000 head, up from 463,000 a week ago and 394,000 a year ago.

Live cattle futures posted losses ranging from 35 cents to $1.15 under pressure from technically-driven long liquidation/selling, with firm cash cattle markets and wholesale beef prices limiting declines. Nearby Aug. live cattle fell $1.15 to $184.28, while Oct. futures fell 73 cents to $184.15.

The short-term chart picture for live cattle futures has turned a bit negative with Aug. futures posting their lowest close in 6 sessions at $184.28 after trading as low as $183.63 after failing above the top of their recent trading channel for three straight sessions last week. The market has nearby resistance now at $185.15 and at $187.43. Futures discount to a firm cash market should limit the downside.

Plains cash markets were quiet today as is typical for a Monday with no packer bids or feedlot asking prices reported. Trade may develop earlier than the past couple of weeks due to the July 4 holiday, but significant trade is unlikely to occur before Wednesday afternoon. Beef cutout values rose $1.91 to $2.86 with the choice cutout finishing at $329.18.

Feeder cattle futures finished $1.70 to $1.98 lower under pressure from technically-driven selling, live cattle futures weakness and weaker cash markets. The CME cash feeder cattle index dropped $3.00 today, which may put some further pressure on prices on Tuesday. Aug. feeder cattle futures posted their lowest close in 15 sessions at $257.38 and now have nearby chart support at $256.13-$256.40.

BROCK MARKET POSITIONS:

CORN: Cash-only Marketers: 2023 CROP: 100% sold on regular forward contracts and hedge-to-arrive contracts. (5-5-22, 9-29-22, 1-4-23, 1-10-23, 2-24-23, 6-15-23, 7-19-23, 1-2-2024, 4-17-24, 5-8-24, 5-15-24, 5-16-24, 6-20-24).

2024 CROP: 50% sold on hedge-to-arrive contracts and regular forward contracts (7-19-23, 8-15-23, 1-2-24, 5-8-24, 5-15-24, 5-16-24, 5-30-24).

Hedgers: 2023 CROP: 100% sold on regular forward contracts and hedge-to-arrive contracts (5-5-22, 9-29-22, 1-10-23, 2-24-23, 6-15-23, 7-19-23, 12-13-23, 1-2-24, 5-8-24, 5-15-24, 5-16-24, 6-20-24)

2024 CROP:40% sold on hedge-to-arrive contracts (7-19-23, 8-15-23, 5-8-24, 5-16-24).; short $5.00 call options on Dec. 2024 corn futures against 20% (4-18-24), short Dec. 2024 corn futures against 20% (5-15-24, 6-20-24).

2025 CROP: No cash sales recommended; short Sep. 2025 corn futures on 20% (6-20-24).

SOYBEANS: Cash-only marketers: 2023 CROP: 100% sold on hedge-to-arrive contracts and regular forward contracts (5-4-22, 11-15-22, 12-1-22, 1-4-23, 1-20-23, 2-24-23, 6-15-23, 7-6-2023, 7-19-23, 11-15-23, 12-5-23, 1-2-24, 5-16-24, 5-28-24, 6-3-24).

2024 CROP: 40% sold on hedge-to-arrive contracts and regular forward contracts (7-19-23, 8-22-23, 11-16-23, 5-16-24).

Hedgers: 2023 CROP: 100% cash sold on hedge-to-arrive contracts and regular forward contracts (5-4-22, 11-15-22, 1-4-23, 1-20-23, 2-24-23, 6-15-23, 7-6-23, 7-19-23, 8-22-23, 11-15-23, 1-2-24, 5-8-24, 5-9-24, 5-16-24, 5-28-24, 6-3-24), aside futures.

2024 CROP: 30% sold on hedge-to-arrive contracts (7-19-23, 8-22-23, 11-16-23, 5-9-24), short Nov. 2024 soybean futures against 20% (5-15-24,6-20-24); long July weekly new-crop $11.30 call options (6-26-24).

SRW WHEAT: Cash-only Marketers: 2023 CROP: 100% sold on regular forward contracts and hedge-to-arrive contracts (11-5-21,4-29-22, 10-18-22, 1-10-23, 4-24-23, 6-26-23, 6-30-23, 7-19-23, 8-29-23, 12-11-23,4-17-24, 4-23-24, 4-29-24); aside futures.

2024 CROP: 70% sold on hedge-to-arrive contracts and regular forward contracts (7-19-23, 4-17-24, 5-8-24, 5-14-24, 5-16-24, 6-4-24).

2025 CROP: 20% sold on hedge-to-arrive contracts (5-30-24, 6-4-24).

Hedgers: 2023 CROP: 100% sold on regular forward contracts and hedge-to-arrive contracts (11-5-21, 4-29-22, 10-18-22, 1-10-23, 4-10-23, 6-26-23, 6-30-23, 7-19-23,8-29-23, 12-11-23, 4-17-24, 4-23-24, 4-29-24); aside futures.

2024 CROP: 70% sold on hedge-to-arrive contracts and regular forward contracts (7-19-23, 4-17-24, 5-8-24, 5-14-24, 5-16-24, 6-4-24); aside futures. 2025 CROP: 10% sold on hedge-to-arrive contracts (5-30-24), aside futures.

HRW WHEAT: Cash-only Marketers: 2023 CROP: 100% sold on regular forward contracts and hedge-to-arrive contracts (11-5-21, 4-29-22, 10-18-22, 1-10-23, 4-24-23, 6-26-23, 6-30-23, 7-19-23, 8-29-23, 12-11-23, 4-17-24, 4-23-24, 4-29-24.

2024 CROP: 70% sold on hedge-to-arrive and regular forward contracts (7-19-23, 4-17-24, 5-8-24, 5-14-24, 5-16-24, 6-4-24).

2025 CROP:20% sold on hedge-to-arrive contracts (5-30-24, 6-4-24).

Hedgers: 2023 CROP:100% sold on regular forward contracts and hedge-to-arrive contracts (11-5-21, 4-29-22, 10-18-22, 1-10-23, 4-24-23, 6-26-23, 6-30-23, 7-19-23, 8-29-23, 12-11-23, 4-17-24, 4-23-24, 4-29-24).

2024 CROP:70% sold on hedge-to-arrive contracts (7-19-23, 4-17-24, 5-8-24, 5-14-24, 5-16-24, 5-30-24, 6-4-24); aside futures.

2025 CROP: 10% sold on hedge-to-arrive contracts (5-30-24), aside futures.

LEAN HOGS: Aside futures.

LIVE CATTLE: Aside futures.

FEEDER CATTLE: Sellers are aside futures. Buyers are also aside futures.

MILK: Short June Class III milk futures on 50% of 2nd qtr. sales (5-15-24); short Aug. 2024 Class III milk futures on 50% of 3rd qtr. sales (5-15-24, 6-17-24); short Oct. 2024 Class III milk futures on 50% of 4th qtr. sales (5-15-24, 6-17-24). We have recorded futures positions for track record purposes. Milk producers were advised to make either cash or futures sales, based on their preference.

FEED BUYERS: CORN: 50% of needs through the end of 2nd qtr. purchased in the cash market (3-4-24); aside futures. SOYMEAL: 50% of needs through the end of 2nd qtr. purchased in the cash market (2-5-24, 3-4-24); aside futures.

COTTON: Cash-only Marketers: 2023 CROP:100% sold (5-19-23, 7-19-23, 7-25-23, 8-3-23, 8-30-23, 11-1-23, 1-19-24, 2-1-24, 2-9-24, 2-12-24); 2024 CROP: 45% forward contracted (2-12-24, 2-27-24, 4-3-24, 6-27-24, 6-28-24).

Hedgers: 2023 CROP: 100% cash sold (5-19-23, 7-19-23, 7-25-23, 8-30-23, 1-19-24, 2-1-24, 2-9-24, 2-12-24, 2-28-24, 3-5-24, 3-14-2024). 2024 CROP: 35% forward contracted (2-12-24, 2-27-24, 4-3-24, 6-27-24); short Dec. 2024 cotton futures on 15% (6-28-24).

RICE: 2023 CROP:100% cash forward contracted (4-25-23, 5-30-23, 7-20-23, 7-31-23, 8-7-23, 11-22-23, 12-5-23, 1-4-24, 2-13-24, 3-25-24). 2024 CROP:40% forward contracted (5-3-24, 5-8-24, 5-28-24, 5-29-24).

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