GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 5 to 7 cents higher.
Wheat: SRW 1 to 3 cents lower; HRW 4 to 6 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Soybeans saw sustained strength overnight while wheat and corn both favored the downside and went into the break nearer session lows. South American weather will continue to weigh heavily on price action as much of western, central, and northern Brazil are forecast to remain hot and dry. Both crude-oil and the U.S. dollar index saw mild gains overnight, while the treasury market saw mild losses, continuing the decline from recent highs, increasing interest rates.
Given erratic rainfall in Mato Grosso and forecasts calling for continued hot and dry conditions, AgRural cut its 2023-24 Brazilian soybean crop forecast by 1.1 MMT to 163.5 MMT. The Brazil-based consultancy warned it could make additional cuts to the forecast this month if weather doesn’t improve, as other areas of the country are also experiencing unfavorable conditions. Besides the erratic weather, there is a need for some replanting of soybeans.
Central and northeastern areas of Brazil were hot and dry during the weekend, while heavy rains continued in far southern locations. Those conditions will persist this week. World Weather Inc. says center-west, center-south and interior northeastern Brazil are all advertised to see some an increase in rainfall next week.
President Joe Biden and Chinese leader Xi Jinping plan to meet Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco. Xi’s confab with Biden is helping spur purchases of U.S. soybeans. China bought around 3 MMT of soybeans from the U.S. last week, even though they are more expensive than Brazilian supplies and processing margins are weak. The purchases are seen as a goodwill gesture ahead of Xi’s meeting with Biden. China is purchasing more than it needs for domestic use, signaling it’s seeking to build stockpiles, said Alex Sanfeliu, head of world trading at Cargill, the world’s largest agricultural commodities trader.
USDA reported daily sales of 204,000 MT of soybeans for delivery to China and 143,637 MT of corn for delivery to Mexico, both during the 2023-24 marketing year.
CORN: December corn futures followed wheat lower overnight, though prices remained supported by last week’s low of $4.61 3/4 until selling intensified into the break. Bulls continue to struggle garnering any momentum as bearish harvest pressure persists. A further break below $4.61 3/4 has bulls targeting support at $4.50. Bears are looking to hold resistance at $4.66 1/2 then $4.70 on a bout of corrective buying.
SOYBEANS: January soybean futures gapped higher overnight and maintained those gains, though saw minimal volatility. The downside last week was capped by 10-day moving average support, currently at $13.44 1/4, which is bolstered by $13.49 3/4 support on the way. Bulls are targeting resistance at $13.65, backed by last week’s high of $13.84 1/2.
WHEAT: December SRW futures continued to slide overnight, breaking prices below the recent uptrend. Bulls failed to maintain trendline support overnight, marking that area as initial resistance now at $5.77 3/4. Bulls are targeting resistance at $5.81 3/4 above that level. Initial support lies at the overnight low of $5.68 1/4, backed by $5.60.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly weaker tone as futures search for a bottom. Futures continue to break down technically, though closed off five-month lows on Friday, which could limit selling pressure after the open. Cash cattle trade continued at weaker levels into Friday, with last weeks’ average expected to fall sharply from the prior week. Seasonal weakness is likely to continue to pressure cattle prices for the next few weeks, though prices usually see an uptick following Thanksgiving as retailers buy beef for year-end features. Wholesale beef prices ended the week mixed, as Choice rose $1.04 to $300.46 while Select fell $2.00 to $267.42.
HOGS: Lean hog futures are expected to open mostly higher, continuing the recent uptrend, though some additional consolidation is possible. December lean hog futures appear to be forming a bull flag pattern on the daily bar chart. This pattern could trigger buying following six days of consolidation, though the CME lean hog index, which fell 59 cents to $76.28 (as of Nov. 9), could limit bulls’ enthusiasm. A bearish seasonal persists in the index, as it has fallen an average of $5.47 over the past five years from now until mid-December, when December futures settle against the index. Wholesale pork prices rose on Friday, though gave up some of the midsession gains. Cutout rose $2.48 to $89.42, above the recent sideways range, though below the Nov. 6 peak of $91.61.