When above normal precipitation is in extended forecasts for late-June into early-July, it’s difficult to see corn prices rally. A weather risk needs to be in place to lift prices and the market clearly isn’t too concerned about recent flooding events. The forecast for the first week of July keeps above normal rain chances in place while excessive heat is well south of major U.S. growing areas.

Looking at precipitation ranks over the last month, areas of southeast South Dakota, northwest Iowa and southern Minnesota are close to setting records for how wet they’ve been. Meanwhile, an area stretching from southeast Iowa through Illinois, Indiana and Ohio are seeing near-record dryness.

The weather situation has been far from ideal for several areas and we believe the wet planting season will still have an impact on yield potential. The problem is that the weather issues that have occurred will take time to be seen by the powers that put out production estimates. The trade is looking for a slight increase in corn planted acres in Friday’s report as it was believed that the USDA came in too low with their 90 million acre forecast back in March. Managed money has been pressing the downside with the fund net-short position again pushing over 200,000 contracts. It will not take much to reverse the latest downtrend in the market, but a spark is needed and that could come on less corn acres from a wet spring planting season or lost production because of recent flooding events. Above normal temperatures are expected to remain in the forecast well into July so any sign of a few weeks of dryness will ignite a sizeable bounce in the corn market. We’re looking for a return trip in December futures back above $4.80 for another round of new crop sales.

Weekly corn export sales of 27 million bushels were at the low end of expectations. Cumulative old crop sales are up 38% from last year with the USDA calling for a 29% increase.

The Chicago wheat market nearly erased all of its May/June rally to land within the $5.50 to $5.60 area early this week and we should see downside risk diminish. Prices are bouncing big on Thursday with help from lower than expected wheat acreage forecasts in Canada. Dry weather in southern states of the U.S. have winter wheat harvest moving at a fast pace so harvest pressure may wind down quicker than normal. Seasonal strength will also be on the wheat market’s side as prices tend to find a bottom in late-June and rally into July. The world carryout situation has been on a tightening trend and we don’t believe we’re past Russia’s production concerns. Consider buybacks after the Chicago September contract has fallen into a major support zone.

Wheat export sales of 25 million bushels were above expectations and a five-month high. Cumulative wheat exports are up 45% from a year ago with the USDA calling for an 11% increase.

November soybeans are threatening a move below $11.00 as we approach the end of June with previous areas of support within the $11.15 to $11.25 area providing no help. If we don’t get a lower-than-expected soybean acreage report from the USDA and weather forecasts continue to be viewed as nonthreatening, the risk stays to the downside. The market can go lower, but we expect a few more swings to the topside and we’d expect those swings to be violent.

Consider safe long positions because the soybean market can rally in a hurry and rally big on any sign of weather risk. There is no premium in the market and prices have fallen enough to factor in most of the bearish news.

Soybean export sales of 14 million bushels were at the low end of expectations. Old crop sales are down 15% from last year to match the USDA expectation.

Live cattle prices have extended their upside movement this week as the August contract has its sites set on the September 2023 highs that were set around $192. Beef cutout values have moved into the $322 to $323 area this week while the cash market is surging to $195. The August live cattle contract is narrowing its gap between the cash market, but strong cash gives the futures market some room to run. Don’t be afraid to get downside hedge positions in place following recent strength and especially be ready to go on sales if prices move over $190.

Hog prices have put in bullish key reversals twice now, but the market has struggled to maintain upside momentum. The cash hog index has slipped to $89 while pork cutout values are slipping to $94 from $96 a week ago. A strong weekly pork export sales report at 39,200 metric tons wasn’t enough to help the hog market today.

The market has shown signs of strength but will need a theme of stronger demand signals to continue to allow for a rally to stick. We’re looking for a recovery back to the $94.00 to $96.00 area in the August hog contract to establish new downside hedge positions.

Ahead of Thursday afternoon’s Hogs and Pigs Report, all hogs and pigs are expected up 101.2% from last year, which would be the largest June 1^st hog inventory in four years. Hogs kept for breeding is expected at 97.7% of last year with hogs kept for market expected at 101.5% of last year.

Corn planting progress was at 91% through last Sunday, the first condition rating of the season came in at a solid 75% good to excellent, wheat prices are facing a sharp pullback from recent highs and weather premium has been extracted from the market. All of those factors took July corn from its recent highs set near $4.75 back to a key support area within the $4.35 to $4.40 zone. I don’t think corn prices go a whole lot lower since we have some production uncertainty in play, but it will take a new weather concern to bring back upside momentum.

The July corn contract found good support throughout the late winter and early spring timeframe within the $4.35 to $4.40 area and the move back into that area will have us considering lightening up on any short hedge positions or adding buybacks for an attempt to add value back to previous sales if prices can rally again. The market might sit here for a while until better support returns but look for normal summer weather volatility to eventually promote some upside movement.

The crop has been mudded into the ground in a lot of areas because the calendar said you better get it planted. There’s the risk that some corn acres were lost in areas where the rains haven’t stopped. We need a drier weather pattern short-term, but it’s always ‘careful what you wish for’. All it will take is a late June, early July hot and dry forecast and prices will rally again. The potential will also be in place for Russia to take on further production downgrades after frost and ongoing dry conditions put some risk in place. It’s always difficult to know if we’re getting the full story on production potential from other countries, but Russia may not be far from limiting grain exports. The bottom line remains that weather-related rallies will need to be used for sale opportunities so be ready when they happen.

Weekly corn export sales of 46.5 million bushels were on the high end of pre-report estimates that ranged from 24 to 47 mb. The USDA also reported an export flash sale this morning of 6 million bushels of corn sold to unknown destinations.

The July Chicago wheat contract is roughly 70 cents off its recent $7.20 high after rallying $1.70 from mid-April to late-May. 50% retracement of that entire rally is $6.35. Failure to find any support at $6.50 during Wednesday’s session indicated there might not be much buying interest around while the trend has turned down in a hurry. It is not uncommon to see the wheat markets erase the entirety of rallies and that remains the risk for now.

The U.S. winter wheat harvest will soon get into full swing and strong production potential here is helping to overshadow growing weather concerns for the Black Sea region. Private forecasters are cutting Russia’s production estimates after frost and dryness issues. Drier conditions are expected to stay the theme for the Black Sea region, and I think that will eventually rally the wheat markets again. The market is in need of a spark and we’re keeping an eye on Russia since it may not be long before they announce a restriction on exports.

New crop wheat export sales of 22.7 million bushels were above estimates that ranged from 7 to 20 mb.

July soybeans couldn’t make the jump above $12.50 and are working on a 7-day losing streak that has seen prices fall as much as 75 cents. The market is trying to find support this week around $11.75 but early morning rally attempts haven’t been sticking. New crop export commitments are the lowest in over 20 years, carryout estimates are bearish and weather concerns are off the table for now.

It is common for the soybean market to see multiple big swings throughout the summer and I hate to make it sound simple, but just don’t sell on the way down. The July contract is making its way towards key support that sits near $11.50 and it will be worth adding some length to the hedge account with a lot of summer volatility still to get through. There’s going to be a limit to how high prices can go because of ample world supplies, but it doesn’t take much of a weather concern to fire up buying interest.

Soybean export sales of 7 million bushels were on the low end of estimates that ranged from 6.4 to 23.8 mb.

If live cattle prices can get past the news of a person dying in Mexico that had contracted bird flu, it should serve as a good signal that bird flu scares are behind us. Boxed beef cutout values are performing well this week, pushing beyond $315 but the cash market is pulling back to provide an offset. The August live cattle contract has room to fall into the $172 to $174 range before finding a better support area, but significant downside risk may be avoided if cash prices don’t set back as badly as feared. Ongoing tight supplies and booming stock prices should keep underlying support in place. We will look to add downside hedge coverage on rallied above $180.00.

The collapse in the hog market has something to do with short-term ample supplies and the fact that demand isn’t running at a strong clip but probably has more to do with fund liquidation. Managed money was sitting on massive length when hog prices were above $100 and now the length is heading for the sidelines. There’s room to fall closer to $90.00 and it’s not uncommon to extend moves beyond what’s reasonable. Be prepared for more downside as hog prices likely are making their final downside push to force everyone out. The June contract will likely hold in the low-$90.00 area as it sits close to the cash index and that should soon start to become more of a supportive factor for the July and August contract. A rebound needs to be used to make sure downside coverage is in place, especially as summer contracts push back above $100.00.