GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 2 to 4 cents higher.
Wheat: 8 to 12 cents lower.
GENERAL COMMENTS: Corn and wheat futures traded lower overnight while soybeans firmed in a reversal of Thursday’s price patterns. Malaysian palm oil firmed 4.6%, though that failed to support soyoil, which was pressured by weaker crude oil prices. The U.S. dollar index is nearly 300points higher this morning, which will weigh on both corn and wheat and may limit buying in soybeans.
Soybeans and soymeal should find support from daily export sales announcements. USDA reported 392,000 MT of soybean sales to China, 198,000 MT of soybean sales to unknown destinations and 230,000 MT of soymeal sales to the Philippines – all for 2022-23.
China’s consumer price index rose 2.8% versus year-ago in September, up from a rise of 2.5% the previous month and the highest reading since April 2020. Food prices jumped to a 25-month high of 8.8% above year-ago, driven by a 36.0% surge in pork prices. Non-food inflation eased to 1.5%. China’s producer price index fell to a 20-month low of 0.9% in September, marking the 21st straight month of declining factory-gate prices.
General risk appetite in markets has up-ticked a bit on reports the United Kingdom government is going to roll back part of its controversial tax and spending plans that has roiled the financial markets the past two weeks. Liz Truss was considering allowing a rise in corporation tax next April, something she promised to halt in her bid to be prime minister. There are also reports Truss will fire her finance minister Kwasi Kwarteng in a bid to survive the market and political pressure unleashed by their fiscal plan. The British pound fell against the dollar.
China will hold week-long Communist Party Congress, starting on Sunday. Key questions on leadership and any policy shifts are expected to emerge from the important meeting.
Corn export sales for the week ended Oct. 6 totaled 200,200 MT. That was below expectations of 300,000 to 900,000 MT. Weekly exports totaled 422,600 MT.
Soybean export sales totaled 724,400 MT, with China accounting for 622,300 MT of that tally. That was near the lower end of the range of pre-report estimates from 600,000 MT to 1.4 MMT. USDA reported exports of 888,000 MT, with China taking shipment of 607,100 MT.
Weekly wheat export sales totaled 211,800 MT, which was near the lower end of expectations ranging from 200,000 to 500,000 MT. Exports of 560,500 MT were led by shipments of 135,600 MT to China.
CORN: December corn pulled back to a low of $6.92 overnight but was still above last Friday’s close at $6.83 1/4. Near-term support is at the 10-day moving average just above $6.88. Near-term resistance is the psychological $7.00 mark, followed by Monday’s high at $7.06 1/2.
SOYBEANS: November soybeans reached as high as $14.10 overnight but backed well off that level at the end of the session. The contract is still well above last Friday’s close at $13.67. Near-term resistance is Wednesday’s high at $14.14 and the 40- and 50-day moving averages in the $14.18 to $14.18 1/2 range. The 5-day moving average just under $13.88 is near-term support.
WHEAT: December SRW wheat dropped as low as $8.78 overnight, which was below last Friday’s close at $8.80 1/4. Near-term support is Thursday’s low at $8.63 and the 40-day moving average at $8.59. Near-term resistance is the 10-day moving average just above $8.97 and the psychological $9.00 level.
LIVESTOCK CALLS
CATTLE: Steady/firmer
HOGS: Steady/firmer
CATTLE: Live cattle futures should find support from a firming cash market. Cash cattle trade got started around $145 in the Southern Plains on Thursday, about $1 above last week, though some feedlots held out for even higher prices. Northern feedlots were seeking at least $1 higher prices for this week’s supplies. Based on the initial trade, the cash market will make a new high for the year, which would be the highest level since 2015. But traders have been cautious buyers in live cattle futures, so more choppy price action is possible. Choice boxed beef slipped 13 cents Thursday, while Select firmed $1.60. Movement surged to 196 loads, signaling a big pickup in retailer demand. Weekly beef export sales totaled 13,200 MT, with exports of 16,500 MT.
HOGS: Lean hog futures are expected to open firmer on support from signs the cash market has stabilized, though a pullback from recent gains is possible ahead of the weekend if early buyer interest is light. The CME lean hog index is 18 cents higher to $92.67 (as of Oct. 12). That’s the second day in the past four prices have firmed. The cash market is likely to face pressure through year-end, but there is a possibility an early seasonal low will be posted. The pork cutout value dropped 87 cents Thursday and movement slowed to 255 loads. Weekly pork export sales totaled 29,900 MT, with Mexico buying 8,100 MT and China buying 5,900 MT. Exports of 28,500 MT were led by shipments of 12,100 MT to Mexico and 5,800 MT to China.