GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 5 to 7 cents lower.
Wheat: Winter wheat 3 to 5 cents lower; HRS 5 to 7 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the downside during the overnight session though saw modest buying into the break. Outside markets were quiet overnight aside from surging crude oil futures, which have gained over $5 since last week’s low. The dollar index is trading around 100 points higher.
Forecasts call for seasonal to above-normal temperatures across the Plains, Corn Belt, Delta and Southeast for most of this week. World Weather Inc. says rains will be restricted in these regions, but not totally absent. Cooler temps are expected to gradually develop by the weekend and last into next week, though rains will remain limited.
Over 9,000 railway workers from Canadian National Railway (CN) and Canadian Pacific Kansas City Railway (CPKC) will return to work today following a Canada Industrial Relations Board (CIRB) decision. CIRB upheld the federal labor minister’s directive for binding arbitration to resolve ongoing contract disputes between the railways and the Teamsters Canada Rail Conference (TCRC) union. This ruling follows a shutdown of the Canadian rail system due to lockouts over issues like worker scheduling and compensation. CIRB’s order requires the resumption of operations by Aug. 26 and extends the terms of the previous labor agreement until new contracts are finalized through arbitration, which is scheduled to begin on Aug. 29. The Teamsters union plans to appeal the decision, citing concerns over the precedent it sets for future labor disputes.
Crude oil prices spiked but there is keener risk aversion in other markets after the weekend military exchanges between Israel and Hezbollah. Israel conducted preemptive air strikes against Hezbollah installations that Israel said were poised to attack Israel, with Hezbollah then retaliating and launching missiles into Israel.
CORN: December corn futures marked a fresh contract low overnight. Initial support stems from $3.85 1/2 with further backing from psychological support at $3.75. Initial resistance stems from the prior low at $3.90 then the 10-day moving average at $3.94 3/4.
SOYBEANS: November soybean futures gave up most of Friday’s rally overnight. Support lies at $9.61 1/2 with further selling seeking to overcome the contract low of $9.55. Resistance stands at $9.68 1/2 then the 10-day moving average at $9.75 3/4, which capped gains last week.
WHEAT: December SRW futures forged a fresh contract low overnight. Prices are near the lower end of the recent downward sloping channel, marking support at $5.20. Further support lies at $5.14 1/4. Resistance lies at $5.35 1/2 then the 10-day moving average at $5.42.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a firmer tone, driven by continued strength in the wholesale market. Choice cutout was up $1.35 to $317.34 though Select dropped $1.57 to $300.46 Friday. USDA’s Cold Storage Report showed robust demand for beef in July, as stocks dropped 799,000 lbs. from June, whereas the five-year average is a 10.8-million-lbs. increase. Meanwhile, the Cattle on Feed Report on Friday was mildly negative. Cattle in feedlots were 65,000 head higher than expected at 11.095 million. Placements increased 5.8% (3.2% increase expected) and marketings rose 7.7% (8.1% increase expected).
HOGS: Lean hog futures are expected to open higher on continued strength in wholesale prices. Pork cutout surged for the second consecutive day, with whole cutout rising $2.62 as all cuts except ribs posted gains on Friday. Rebounding demand, as noted in Friday’s USDA Cold Storage Report showing pork stocks dropped 24.2 million lbs. in July, far greater than the five-year average 7.2-million-lb. decline for the month. Weakness in the cash market, noted by the CME lean hog index falling another 61 cents to $88.22 as of Aug. 22, could limit gains after the open.