GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 25 to 30 cents lower.
Wheat: Winter wheat markets 8 to 12 cents higher; spring wheat 1 to 3 cents higher.
GENERAL COMMENTS: Soybean futures were pressured overnight by weekend rainfall across the Corn Belt, while wheat rallied amid mounting tensions in the Black Sea. Corn was caught in the middle but modestly favored the downside at the end of overnight trade. We expect widely varied trade in the grain and soy markets this morning. Outside markets are price-negative for grain and soy futures, with crude oil lower and the U.S. dollar index firmer.
USDA reported daily sales of 251,460 MT of corn to Mexico and 132,000 MT of soybeans to China – both for 2023-24.
Rains fell across much of the Corn Belt, along with areas of the Southern and Central Plains, Delta and Southeast during the weekend. World Weather Inc. says more rains are expected over the next 10 days, including in the Midwest, central and northeastern Plains, Delta and Southeast. Texas will continue quite dry and hot south of the Red River during the next 10 days.
Ukraine’s State Hydrographic Service warned on Friday the Russian Black Sea ports of Taman, Anapa, Novorossiysk, Gelendzhik, Tuapse and Sochi should now be considered subject to “military threat.” The statement came just hours after a naval drone struck vessel was stationed outside Novorossiysk on Friday. On Saturday, another sea drone hit a Russian-flagged oil tanker that supplies fuel to Moscow’s forces in Syria. Ukraine’s defense ministry confirmed it struck key bridges on one of two roads that connect Crimea to the Ukrainian mainland on Sunday. The attacks put at risk Russia’s commodity exports via the Black Sea, a route that accounts for most of the grain and 15% to 20% of the oil that Russia sells daily on global markets.
An explosion rocked grain silos near the port of Derince in western Turkey, state broadcaster TRT and other media reported.
Senior officials from some 40 countries including the U.S., China and India held talks in Saudi Arabia during the weekend that Kyiv and its allies hope will lead to agreement on key principles for a peaceful end to Russia’s war in Ukraine. Russia, who was not part of the talks, denounced the efforts, with its foreign ministry saying the meeting was “a reflection of the West’s attempt to continue futile, doomed efforts” to mobilize the Global South behind Ukraine’s position.
Heavy rains caused flooding across northeastern China, the country’s grain basket, including top producer Heilongjiang province. The rains are expected to continue this week as typhoon season continues to wreak havoc, raising the risk that more agricultural land will be flooded, according to the National Meteorological Center. The northeastern region, which also includes the provinces of Liaoning and Inner Mongolia, produces almost 30% of China’s grains, accounting for 45% of the national corn harvest, 60% of soybeans and 20% of rice.
Brazil’s safrinha corn harvest reached 64% done as of last Thursday, according to AgRural. That was behind last year’s pace of 80% for that date. Harvest is nearly completed in Mato Grosso and Goiás, while late-season rains continued to hamper progress in other states.
CORN: December corn futures held in the short-term consolidation range around last week’s lows during the overnight session. Last week’s double-bottom at $4.93 is initial support, with stronger support at the July low of $4.81. The 5-day moving average at $4.99 and the psychological $5.00 level are near-term resistance, with additional resistance in the $5.06 6o $5.10 range.
SOYBEANS: November soybean futures posted a downside breakout from the bear flag formation overnight. A close below previous support at $13.15 would confirm the bearish breakout and project the contract toward $12.00. We don’t believe futures would fall that far as global end users are signaling via purchases they see value at current levels, but that’s what tecnicals would indicate as a possibility.
WHEAT: December SRW futures posted strong gains overnight but failed to clear last Friday’s high. That level at $6.81 1/4 is near-term resistance, followed by layered resistance from the $6.90 to $7.01 area. Last week’s low at $6.54 1/4 is near-term support.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone after price strength last Friday and support from the cash market. Traders will have to wait until later this morning to get the official average cash cattle price from last week, but cash sources reported higher prices in the northern market last Friday, which should have pulled the overall price up from the previous week. Given tight supplies, traders generally expect the cash market to strengthen again this week. Wholesale beef prices fell on Friday, with Choice down 22 cents and Select $1.83 lower.
HOGS: Lean hog futures are expected to open with a mostly weaker tone amid signs the cash market has posted a seasonal top. But discounts futures hold to the cash index should limit selling. The CME lean hog index is down 39 cents to $105.47, marking four of the last six days with declines. Hog futures rolled over last week amid signs the cash market has posted a seasonal top. As of Friday’s closes, August hogs stood $4.445 below today’s cash quote, while the October contract was more than $22 below the cash index and December hogs held more than a $30 discount. The pork cutout value dropped $1.94 on Friday, as primal bellies fell $10.71.