GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: 10 to 15 cents higher.
GENERAL COMMENTS: Wheat futures led a round of corrective buying during the overnight session, which is expected to continue at the start of daytime trade.
USDA reported daily soybean sales of 132,000 MT to China for 2024-25 and 212,000 MT to unknown destinations – 50,000 MT for 2023-24 and 162,000 MT for 2024-25. USDA also reported 100,000 MT of soymeal sales to Colombia – 12,000 MT for 2023-24 and 88,000 MT for 2024-25.
Weather conditions are expected to remain generally favorable across the central U.S. over the next week to 10 days, with rains likely to push across the Corn Belt while temps will run cooler than normal. Rainfall will be mostly restricted in the Delta and Tennessee River Basin, while temps will be near seasonal levels.
Traders are preparing for USDA’s August crop reports on Monday, which will feature the first survey-based corn and soybean crop estimates. Click here to see analysts’ pre-report expectations. Despite funds being heavily short grain and soy futures, there has been little interest in actively covering short positions.
Algeria purchased around 600,000 MT of optional origin milling wheat that’s expected to be sourced primarily from Russia and other Black Sea countries. South Korea purchased 68,000 MT of corn expected to be sourced from South America.
A pair of Argentine oilseed industry unions announced a one-day extension to an ongoing strike that has halted operations at the country’s major ag export hubs. Today will be the fourth day of inactivity by the oilseed workers, who are seeking better wages. The number of grain ships facing loading delays due to the strike had risen to 36 by midday Thursday.
Consultancy IKAR raised its Russian wheat crop forecast by 600,000 MT to 83.8 MMT, with total grain production now expected to reach 129.5 MMT. IKAR raised its 2024-25 export forecast for the country to 44.5 MMT, up 500,000 MT from its prior outlook. Total grain exports are expected to total 56.2 MMT.
SovEcon cut its Russian wheat crop estimate by 1.8 MMT to 82.9 MMT.
France’s ag ministry slashed its estimate of the country’s wheat crop by 3.33 MMT to 26.32 MMT, which would be the smallest crop since 1986. However, that’s above estimates from private firms Strategie Grains and Argus Media, which were cut to 25.6 MMT and 25.17 MMT, respectively, earlier this week.
China’s consumer price index rose to a five-month high of 0.5% above year-ago in July. Food prices jumped from a 2.1% decline in June to unchanged with year-ago last month, led by a 20% surge in pork. China’s producer prices dropped 0.8% annually in July, the same pace as the prior month, marking the 22nd consecutive month of producer deflation.
CORN: December corn futures bounced from the Aug. 1 contract low of $3.95 during the overnight session, marking a double-bottom at that level. Below that, bears would target this month’s low of $3.77 on the continuation chart. Resistance is heavily layered from the psychological $4.00 mark to the 20-day moving average at $4.07.
SOYBEANS: November soybean futures held above support at Thursday’s low of $10.07, which was the lowest level for the contract since late January 2021. Below that, support would be at the psychological $10.00 mark. Near-term resistance stands at the 5-day moving average near $10.21 1/2.
WHEAT: December SRW futures bounced from the 10-day moving average at $5.59 3/4 overnight and pushed above resistance at $5.71 3/4. Next resistance is around the $5.80 level.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open lower on continued liquidation pressure. While cattle futures are short-term oversold, moves to the upside this week have been brief and met with fresh selling. With money flow the primary driver of price action, fundamentals and big discounts to the cash market have been pushed to the back burner. Key to price action to close out the week could be whether Monday’s reaction lows hold. If not, a fresh wave of technical-based selling would be likely. Wholesale beef prices extended the recent decline, dropped $1.73 for Choice to $312.12 and 80 cents for Select to $298.03. Cash cattle activity picked up Thursday with prices mostly lower than week-ago.
HOGS: Lean hog futures are expected to open under pressure in a continuation of this week’s price drop. While futures finished near session highs on Thursday, bears have short-term momentum and there isn’t a compelling reason for traders to be buyers, aside from the $2.775 discount August futures hold to today’s CME lean hog index quote. But with the index down another 30 cents, marking the fourth straight daily decline, there are increased thoughts a seasonal top was posted on Aug. 1. Pork cutout fell 73 cents on Thursday to $98.23, the lowest level since July 11.