|July corn futures were 13 1/4 cents higher today at $6.04, July soybeans rallied 13 1/4 cents to $13.37 1/4, and July wheat in Chicago gained 11 3/4 cents to close at $6.16. The US dollar was weaker while the energies and equities were higher.
Positioning for the long holiday weekend was a primary factor in today’s session. This generated short covering across the board and brought in light buying as risk premium was added to futures. Trade does not seem real concerned with current weather across the US, but long-range models are starting to gain interest. We are also starting to see drier patterns develop in Russia and Australia which gave the grains much of their support today. Reports that progress is being made on US debt talks also gave the commodity market support today as this weighed on the dollar and favored outside market values. The US is seeing elevated river movement and in turn this is starting to give interior basis more strength. Russian officials are already stating the Black Sea corridor will end in July unless all sanctions are lifted. In all reality the corridor is likely to stay open until China imports its fill of Russian products. How we start trade next week will depend heavily upon weekend weather developments. Monday night trade could be exciting.
Corn futures were higher today as short covering developed in the complex. Weather was a primary reason for this along with the potential loss of acres in the US. Maps indicate 26% of the US corn production region is in drought, up 1% from last week. Next week’s planting progress will center on North Dakota as that state is now at its prevent plant date. Corn also took technical support today as it continues to build an uptrend from the May 18th low of $5.47. Tightening corn inventories and firming cash markets were supportive for futures as well. Advances were capped by ongoing demand worries as export sales still trail estimates by 8%. We continue to see old crop sales washed out of and new crop sales are minimal giving trade the indication total corn use is overstated. Even with weather worries it will be hard to sustain a long-term rally in this scenario. For the week July corn gained 49 ½ cents.
Sizable advances were made in the soy complex today from pre-weekend buying. Soybeans are not taking as much weather support as the grains right now but did benefit from trading above the 9-day moving average. The July contract has tested the $13.05 level three times and rallied making that point firm support. Palm oil finally firmed after posting losses for the past three session which was also favorable for the soy complex, as was a correction in soy products. Declining demand limited the day’s gains for soybeans as year to date sales are now down 7% from USDA projections. Importers are starting to source alternative protein meals, and this is cutting into world soy demand. Ongoing competition from cheaper South American offers is weighing on all oilseed markets. A shift in China’s feeding to more wheat may impact the country’s futures soybean imports. July soybeans gained 30 cents on the week.
While weather has been supportive for futures trade this week, next week is when we may see it become more of a driving factor. Being dry at this stage of the year is actually favorable as it allows planting to take place. Drier conditions also tend to help plants establish better root systems. If rains do not start to show up as we move into early June, we will see more of a bullish reaction. This is especially the case with warmer temperatures being forecast which will further reduce soil moisture content. Funds are heavily short the grains and approaching even on soybeans and this may be the catalyst that turns their market opinion.
The April beef and pork production numbers for the US have been released with lower output being seen. Beef production in April totaled 2.07 billion pounds, a decline of 11.1% from April 2022. This was mainly from a 9.6% reduction to cattle slaughter that equated to 2.54 million head. Pork production was down 3.7% for the month at 2.12 billion pounds. April hog slaughter was reported at 9.77 million head, a 3.1% reduction. Live weights were down on both cattle and hogs during the month which also lowered product output. Cattle weights in April were down 19 pounds from a year ago while hog weights were down 2 pounds.