Corn Bounces Off Lows - Can $4.50 Open the Door for More Relief?

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NOPA reported 208.785 million bushels of soybeans were crushed during May, below the average trade guess calling for 211.86 mb, but up 8% from a year ago.

• Weekly corn export inspections of 64.4 million bushels were within expectations, taking cumulative corn inspections to 26% ahead of last year’s pace.
• Soybean inspections of 19.2 million bushels were within expectations. Cumulative soybean inspections are down 20% from last year’s pace.
• Wheat inspections of 12.3 million bushels were below estimates. Cumulative wheat inspections are down 6% from a year ago. 

Grain and Oilseeds Wrap Up

Corn

The corn market was quick to jump from 5 to 6 cent overnight losses when the daytime session kicked off. Prices again set a fresh low near $4.34, initially following the US/Iran headlines and crude oil into negative territory before recovering. The December contract can easily erase a portion of recent heavy losses, but enthusiasm will be lacking while funds have shed their length and weather forecasts aren’t showing much to get excited about. You might have to pick your spot and play for small moves for a little while longer.

Soybeans

November soybeans were able to bounce from dime losses they were taking on late in the overnight session and held onto small gains the rest of the way. There’s room to fall into the $10.80 to $10.90 area before long-term uptrend support comes into play if supportive news doesn’t arrive soon to reinvigorate buying interest. 

Wheat

The wheat markets haven’t been able to hang onto double-digit rally attempts lately but it was nice to see they didn’t want to maintain double-digit losses today as well. Both the Chicago and Kansas City wheat markets ended the day nearly 20 cents off their overnight lows. The KC July contract is clinging to its 100-day moving average for support within the $6.20 to $6.30 range while the July Chicago contract tries to hang on above its 200-day moving average around $5.75. We know funds aren’t afraid to press short positions in the wheat markets so plan on using any strength to get defensive while harvest pressure approaches.

Cattle

August live cattle reached gains of a little over $2.00 to start the week to have prices right on top of 50-day moving average resistance at $243.50. A breakout above there and there won’t be much to stop prices from challenging previous contract highs set around $250 for the August contract. Failing to push past resistance likely sends prices back into the $235 to $240 zone, where those looking to enter the long side would get another shot.

August feeder cattle reached gains of $4.00 to $5.00 as the market hits 50-day moving average resistance as well at $361.75. Fresh highs are being reached to extend the recovery bounce that was sparked by screwworm entering the US. Similar to the live cattle chart setup, a breakout above the 50-day moving average leaves little to stop prices from a re-test of previous highs set around $375.

Hogs

August hogs traded on both sides of even throughout the session, failing to hold midday gains of around 50 cents and threatening a dollar loss late in the session. The hog market began the downtrend in early March and has shown little signs of reversing course. The August contract likely sees a rebound to the 20-day moving average near $98.00 and from there, needs the tide to drastically shift for a chance to push back over $100.00. 

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