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Market Snapshot
Opening Comments: Monday, July 1st, 2024
It’s not irrational at all to say that all weather premium has been priced out of this market. The funds have essentially done something unprecedented which was entering June in net short positions and then adding more short positions by the end of the month. Tracking back to the early 2000s when these markets changed forever, when the funds were short entering June, they were decidedly net buyers over the course of the following 4 weeks. Not this year. Taking an even shorter position leaves them very susceptible to any weather events that would threaten current projected yields and ending stocks. Who thinks weather is done for the season? We all know it’s coming. We just have to watch closely and spot it when it does. And we will.
Price Update for Monday at 6:00 am CT
Grains
Corn
Last Update: 01-Jul-2024 06:13 am
With lack of drought, a bearish acres report, and weak exports, there has been little to slow the downward turn we’ve seen since May highs. 2023/2024 US corn exports last week were off 21% from the previous weeks and 11% down from the 4-week average. Taken with an acreage forecast which beat estimates and there wasn’t much for the bulls to buy with. Nonetheless a runaway downturn was avoided before close on Friday as December corn prices saw a late 9 cent bounce off session lows. That’s a nice way of saying it could have been worse and it also hints that there might finally be some support at what’s hopefully the bottom.
Soybeans
Last Update: 01-Jul-2024 06:13 am
Soybean acres coming in below trade estimates provides the possibility of at least some short covering here in the near term. Projected stocks were raised though, and similarly disappointing weekly export numbers as seen with corn, led to a near neutral session on Friday. There was a 49% drop-off in soybean exports sales from the prior week and a 19% drop from the 4-week average. Increasingly dry conditions bear further watching in the eastern corn belt, beginning in places like Illinois along with Indiana and extending east. The growing possibility of rapid onset drought is the biggest weather threat to both corn and soybeans right now.
Wheat
Last Update: 01-Jul-2024 06:13 am
The wheat market holds the most immediate bullish news among the big 3 grain markets. And it’s welcome after the largest monthly decline since June of 2022. We’re seeing supportive signs in 3 phases right now – exports, acres, and condition. Net 2024/2025 sales pushing past 667,000 metric tons, combined with fewer winter wheat acres than guessed and declining spring wheat conditions are providing reason for some optimism. Winter wheat acres were close to 400,000 acres below industry estimates. And don’t forget, we also had last Monday’s crop progress report showing a decline in spring wheat from 76% good to excellent down to 71%.
Livestock
Cattle
Last Update: 28-Jun-2024 01:19 pm
August live cattle prices had rallied $4.00 for the week coming into the day before giving a portion of the rally back. It’s likely some resistance is found as prices approach the $190 area. Boxed beef cutout values rallied another $2.00 to reach $325. If the cash market continues to move higher, expect new highs to be reached once again in the futures market.
Hogs
Last Update: 28-Jun-2024 01:19 pm
Hog prices fell 50 cents to start the day before turning around to post solid gains by the close. The cash market has slipped recently but is holding around $89 while pork values have drifted towards $94 as they lost their grip on the $100 level. A better export sales report this week and “as expected” Hogs and Pigs report should be enough to help put a short-term bottom in place. We’re looking for a rebound into the $94.00 to $96.00 zone for sale opportunities.