GRAIN CALLS
Corn: 5 to 7 cents lower.
Soybeans: 15 to 17 cents lower.
Wheat: HRW and SRW 13 to 16 cents lower, spring wheat 6 to 9 cents lower.
GENERAL COMMENTS: Corn and wheat futures faced followthrough selling overnight, while soybeans dropped more than they gained on Wednesday. Malaysian palm oil futures fell 1.4% after hitting a 12-week peak, while front-month crude oil declined around $1.50. U.S. stock index futures signal a weaker open, while the U.S. dollar index surged more than 1,700 points to a two-week high.
The U.S. dollar rallied and global equity markets sank after the U.S. Federal Reserve hiked benchmark interest rates and signaled more monetary tightening is coming. The Fed on Wednesday raised its funds rate another 75 basis points to a range of 3.75% to 4.0%, as expected. But Fed Chair Jerome Powell rattled markets by saying it was “very premature” to think about pausing rate increases and that the peak for rates would likely be higher than previously expected.
The Kremlin said Thursday it had not committed to extending the deal allowing Ukrainian grain exports from Black Sea ports beyond the Nov. 19 deadline. Russia says it still needs to assess whether the deal was working before deciding whether to extend its participation. Russian Foreign Minister Sergei Lavrov urged the United Nations to step up its efforts to ensure Western countries ease restrictions Moscow says hinder its agricultural and fertilizer exports, which also formed part of the deal.
Ukraine said it had made no commitments to Russia that go beyond the terms of the Black Sea grain deal to persuade Moscow to resume its participation.
StoneX raised its U.S. corn crop estimate to 14.109 billion bu. on a yield of 174.5 bu. per acre, up from its October forecasts of 14.056 billion bu. and 173.9 bu. per acre. The commodity brokerage lowered its soybean crop estimate to 4.413 billion bu. on a yield of 50.9 bu. per acre, down from 4.442 billion bu. and 51.3 bu. per acre last month.
A large portion of Argentina’s grain and oilseed region had little to no rain the past week, World Weather Inc. said, and at least another seven days of dry or mostly dry weather is expected for these regions with temperatures surging above normal at times. “Dryness will expand and intensify across the main production regions, increasing concern for production impacts this season,” the forecaster said.
Flooding and excessive rains across eastern Australia have resulted in extensive damage to the wheat crop. While Australia is still on track for a bumper harvest for a third straight year, about half of the crop grown on its eastern grain belt – around 8 MMT – is likely to be feed-grade wheat. That would result in about one-quarter of Australia’s crop not meeting international milling-quality standards, meaning increased demand for high-quality wheat from other exporters. Argentina is also facing crop struggles, though due to drought.
Russia’s wheat export tax for Nov. 9-15 will be 3,012.0 rubles ($48.52) per MT based on an indicative price of $314.00. That’s up from a rate of 2,923.2 rubles per MT the previous week.
China updated its list of approved Brazilian corn exporters to include 136 facilities. China customs also published a list of 14 Brazilian facilities approved to export soymeal to the country, including those owned by Bunge and Olam. Demand for soymeal, however, is expected to be limited, given China’s large domestic crush industry.
Indonesia’s crude palm oil output is seen at 48.23 MMT this year and exports of palm oil products are estimated at 23.95 MMT, based on a presentation by the chairman of its palm oil fund agency. Palm oil consumption for biodiesel use is estimated at 9.59 MMT this year.
CORN: USDA reported net U.S. corn sales for the week ended Oct. 27 of 372,200 MT, up from 263,999 MT a week earlier and within trade expectations ranging from 250,000 to 600,000 MT. December corn fell as low as $6.81 overnight, holding support just above the 50-day moving average.
SOYBEANS: USDA reported net weekly soybean sales of 830,200 MT, down from 1.026 MMT the previous week and at the low end of trade expectations ranging from 700,000 MT to 1.6 MMT. China was the top buyer at 745,000 MT, including 404,300 MT switched from unknown destinations and decreases of 211,300 MT.
WHEAT: Net weekly U.S. wheat sales totaled 348,100 MT, down from 533,200 MT the previous week and at the lower end of trade expectations ranging from 200,000 to 600,000 MT. December SRW wheat overnight fell as low as $8.27 3/4, the contract’s lowest intraday price since Oct. 28.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-weaker
CATTLE: Live cattle may gain support from cash market strength, while feeders should be supported by continued weakness in corn. Limited cash cattle trade so far this week was reported at prices around $1 higher versus last week, though packers’ relative inaction has caused cautious corrective trade in futures. Packers have been reluctant bidders for cattle this week, choosing to pull from fresh contract supplies and stay out of the negotiated market as long as possible. Choice beef cutout values rose 84 cents Wednesday to $263.47 on strong movement of 152 loads. December live cattle fell 55 cents to $151.40, the contract’s lowest close since Oct. 19.
USDA reported net weekly U.S. beef sales of 9,200 MT during the week ended Oct. 27, down from 14,100 MT the previous week. Purchases by Japan (3,000 MT, including decreases of 400 MT) and other countries were offset by reductions for China (900 MT).
HOGS: Lean hog futures may face followthrough pressure from Wednesday’s sharp declines and from weakness in cash fundamentals, though the market may be due for a corrective bounce. The CME lean hog index is down another 46 cents (as of Nov. 1) to $93.29, the fifth drop in the past six days and a two-week low. While today’s decline is the biggest during that stretch, the net drop has been only $1.52. December lean hog futures finished Wednesday $9.99 below today’s quote of $93.29, larger than the five-year average decline of $6.34 from now until Dec. 16 when the contract will be settled against the cash index. Weakness in wholesale pork may also burden futures. Pork cutout values fell 98 cents Wednesday to a nine-month low of $96.23, though movement was strong at 326 loads.
USDA reported net weekly U.S. pork sales at 47,900 MT, more than double the previous week’s 20,300 MT, led by Mexico (12,700 MT, including decreases of 400 MT), China (11,200 MT, including decreases of 400 MT) and Japan (9,300 MT, including decreases of 200 MT).