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Limit Up

By Tori Uhland

July 4, 2024

Last week marked the official start of summer. While it’s been blazing hot and dry in some places, there have been seemingly endless rains in others. We are definitely in a weather market right now with not much other news to report, but the trade is certainly keeping a close eye on the forecasts.

Soybean basis firmed up last week on a lack of farmer selling. Futures prices rallied last Tuesday but traded weaker in the days following. Drier conditions were present in the eastern belt. Rains moved across eastern Kansas, Northwest Missouri and Southeast Iowa. The temperatures in the Midwest have been higher than normal, but so far it hasn’t been enough to offset the moderate conditions in the Western belt, so the market hasn’t made any big moves. Trendline support for the July futures contract is at $11.52 and the April low of $11.4575. Resistance is at $11.74 and $11.86.

A lack of fresh news in the corn world has kept the price trend continuing sideways. Eastern corn belt areas are seeing light showers, while areas in eastern South Dakota and southern Minnesota are seeing heavier rains. Market action has been choppy but with the pullback in temperatures anticipated, futures are weaker. If weather moderates in the eastern belt, selling pressure could increase and push prices down towards support at $4.36 on the July board. Resistance is at $4.62.

‘Tis the season for wheat harvest, and it isn’t unusual that prices have been pressured down as harvest in the US marches on. Black Sea prices have also been weaker, which doesn’t give any incentive to keep US prices firm. Crop conditions have stabilized in Ukraine and Russia, and the Russian grain exchange has bumped up their production estimate to 82.0 million tons from 81.5 previously. The Buenos Aires grain exchange also raised Argentina’s planted wheat acres to 6.3 million hectares, up from 6.2 in their previous estimate. There hasn’t been any bullish news to offset the selloff.

Cattle markets have been quiet but the futures discount to cash is likely to support breaks. Cash steer prices hit record highs two weeks ago, and there have been some bullish technical signals. Prices may find solid support below $181 on August futures. July hog prices closed near the lows last week, but there should be good support on any pullbacks from that. The June hog and pig report on June 27th is expected to be bearish and may limit any rallies.

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