GRAIN CALLS
Corn: 3 to 6 cents higher.
Soybeans: 10 to 15 cents higher.
Wheat: Winter wheat 6 to 12 cents higher; spring wheat 4 to 8 cents higher.
GENERAL COMMENTS: The new month kicked off with corrective price gains in the grain markets overnight, led by soybeans. We expect that price strength to continue early this morning, though it’s hard to gauge whether the corrective buying will persist ahead of the extended holiday weekend. Outside markets are price-supportive, with crude oil nearly $1.00 higher and the U.S. dollar index more than 200 points lower.
The string of daily new-crop soybean export sales extended to six. USDA announced sales of 198,000 MT to unknown destinations for 2023-24.
Forecasts call for hot and dry conditions across the Corn Belt, Plains and northern Delta over the next week. World Weather Inc. says cooling is expected in the central U.S. during the following week with a boost in shower activity also likely for the Corn Belt and Northern Plains, though rainfall may remain lighter than usual.
Traders expect USDA to report soybean crush totaled 184.0 million bu. in July, based on a Bloomberg survey. That would be up 9.5 million bu. (5.4%) from June and 2.6 million bu. (1.4%) greater than July 2022. Corn-for-ethanol use is expected to total 462.7 million bu., up 21.2 million bu. (4.8%) from the previous month and 16.9 million bu. (3.8%) more than last year.
Non-farm payrolls increased 187,000 in August, topping expectations of 170,000 and rising from the downwardly revised July figure of 157,000. The unemployment rate rose 0.3 points to 3.8%. Average hourly earnings increased 4.3% over the past year. Fed fund futures now show virtually no chance the Fed will raise rates later this month and down to about one-third odds of a hike by year-end.
CORN: December corn futures firmed amid corrective buying overnight but remain well within the short-term consolidation range from $4.73 1/2 to $5.07 1/2. An eventual breakout from that range will likely trigger the next trending move.
SOYBEANS: November soybean futures recouped much of Thursday’s losses during the overnight session and are just slightly lower for the week. The overnight low at $13.66 1/2 is initial support, followed by the 40-day moving average near $13.60. The 5-day average around $13.87 1/2 is near-term resistance.
WHEAT: December SRW futures posted an inside day up overnight amid corrective buying after contract lows the three previous sessions. Bears remain firmly in control of this market, with Thursday’s contract low at $5.93 1/2 serving as near-term support. Resistance is heavily layered from $6.12 to $6.46 1/4.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mixed tone. Futures firmed on Thursday despite steady/weaker cash cattle trade but we doubt there will be much followthrough buying. Cash cattle trade started at steady prices in the Southern Plains, while the northern market traded as much as $3.00 lower. While the northern market continued to trade at solid premiums to the Southern Plains, the weekly price trend was a reversal from the recent patterns. Trading volume remained relatively light, suggesting packers and feedlots may choose to reevaluate their supply situations following the holiday weekend. Wholesale beef prices fell $1.32 for Choice and 28 cents for Select on Thursday.
HOGS: Lean hog futures are expected to open with a mostly weaker tone after a relatively poor close on Thursday. October lean hog futures dropped $1.05 yesterday, but today’s cash index quote is down another $1.41 (as of Aug. 30). That narrowed the discount the October contract held to the cash index to $6.71 as of yesterday’s close, but that’s still a bearish stance as the five-year average is a $1.72 increase from now until mid-October when the contract will be cash settled. The pork cutout value firmed a dime on Thursday amid relatively calm price action, especially in bellies, which have been volatile.