GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 5 to 7 cents higher.
Wheat: SRW 1 to 3 cents lower; HRW 2 to 4 cents lower; HRS 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Price action was varied overnight as soybeans firmed on corrective buying, wheat continued to face selling pressure and corn traded narrowly near unchanged. Outside markets are quiet this morning despite better-than-expected inflation data. Front-month crude oil futures are trading slightly higher while the U.S. dollar index is pivoting near unchanged.
The annual inflation rate slowed for the fourth consecutive month as the Consumer Price Index (CPI) slowed to 2.9% in July, the lowest since March 2021, according to the Bureau of Labor Statistics. That was below 3.0% in June and expectations of 3.0%. On a monthly basis, CPI firmed 0.2% July, up from a 0.1% decline in June. Core CPI (which excludes food, shelter and energy costs) slowed to 3.2%, the lowest since April 2021, below 3.3% in June and in line with expectations.
This year’s rain-soaked French soft wheat crop that will be the smallest since the 1980s is also showing mixed milling quality, with satisfactory protein levels close to last year but erratic test weights, the country’s ag ministry said. Hagberg falling numbers, a milling specification, were generally satisfactory, FranceAgriMer said in a joint statement with crop institutes Arvalis and Terres Inovia, without giving figures for wheat quality results.
Ukraine’s corn production may fall to 20 MMT to 21 MMT from around 30 MMT in 2023 if drought continues, producer group Ukrainian Agrarian Council told Reuters. Most of Ukraine experienced a heatwave in July, which producers expect will decrease the yield of late crops by around 30%. Analysts and traders have predicted Ukraine’s corn crop at between 23 MMT and 25 MMT, while USDA earlier this week cut its forecast by 500,000 MT to 27.2 MMT.
Egypt’s push for delayed payment terms backfired in its bid to secure 3.8 MMT of wheat, as it only purchased 380,000 MT earlier this week. GASC, Egypt’s state wheat buyer required 270-day letters of credit, which led to higher-than-expected offers and limited the purchase volume. Reuters reported Tuesday GASC is in private talks with exporters to buy 30 cargoes (up to 1.8 MMT) of wheat. Russian wheat was said to be among the origins discussed in the talks but it was unclear whether supplies from other countries could also be involved.
CORN: December corn futures traded in a tight range overnight. Bulls are seeking to hold support at $3.95, further selling finds support at the contract low of $3.90 1/4. Resistance stands at the psychological $4.00 mark, which coincides with the 10-day moving average. Further strength seeks to overcome stiff resistance at $4.07.
SOYBEANS: November soybean futures saw corrective buying overnight. Prices marked a fresh contract low at $9.55 1/4, while additional support lies at $9.62 1/2 on the way. Bulls are seeking to overcome initial resistance at $9.75 with further buying seeking to overcome stiff resistance at $9.86.
WHEAT: December SRW futures saw followthrough selling overnight. Bulls are seeking to hold support at $5.48 1/2, with further selling finding the contract low at $5.39 1/2. Resistance stands at $5.58 then the 20-day moving average at $5.64 1/4, which capped gains over the last week.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone, though steep discounts to the cash market could limit selling after the open. While October futures continue to trade near this week’s highs, renewed selling pressure finished prices well off intraday highs on Tuesday, which could persist today. Wholesale beef prices are up for the third consecutive day, as Choice cutout firmed $1.10 to $316.93 and Select rose 44 cents to $300.61 on Tuesday. Cash cattle trade started this week at modestly weaker prices, though volume remains light.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, led be relative strength in pork cutout. Wholesale pork prices stayed above the psychological $100.00 level, firming another 6 cents to $100.33 on Tuesday. Gains in bellies led the way higher, which continue to boast strength as BLT season is in full swing. The CME lean hog index fell another 58 cents to $90.34 as of Aug. 12, though that is a considerably smaller decline than the past couple of days. August lean hog futures will expire at noon today and cash settle against the index when today’s quote is released on Friday.