GRAIN CALLS
Corn: 2 to 3 cents lower.
Soybeans: 4 to 5 cents lower.
Wheat: 5 to 10 cents lower.
GENERAL COMMENTS: Grain and soybean futures fell overnight as traders readied for USDA’s monthly Crop Production update, which is expected to reflect slightly smaller corn production and a slightly larger bean crop. Wheat futures also traded lower overnight. Malaysian palm oil futures rose 1.1%, the market’s eighth gain in the past nine sessions, while front-month crude oil is down slightly. U.S. stock index futures signal a firmer open and the U.S. dollar index is marginally higher.
USDA reported daily soybean sales totaling 526,000 MT received during the reporting period for delivery to China in 2022-23.
USDA releases its Crop Production and Supply & Demand Reports at 11 a.m. CT. The 2022-23 domestic balance sheets will reflect Sept. 1 stocks and the final 2022 wheat crop estimate, along with any changes to this year’s corn, soybean and cotton crop forecasts. That will produce some major adjustments to the supply and demand sides of the balance sheets. USDA is expected to lower its corn crop estimate by 59 million bu. from last month to 13.885 billion bu. and raise its soybean crop estimate by 3 million bu. to 4.381 billion bu., based on a Reuters survey. Ending stocks for 2022-23 are expected to fall to 1.124 billion bu. for corn, increase to 248 million bu. for soybean and drop to 554 million bu. for wheat.
Rain is expected in southern portions of the U.S. Plains (Texas and Oklahoma) Sunday into Monday offering “some much needed moisture to wheat and livestock grazing areas for improved soil moisture and crop establishment,” World Weather Inc. said today. U.S. Midwest weather will be mixed with rain and sunshine, although western Corn Belt areas will be drier biased after today through the next 10 days. “River and stream flows are not likely to seriously change,” the forecaster said.
The Labor Department’s producer prices index rose 8.5% in the 12 months through September, slightly higher than an estimated 8.4% rise. The reading, however, was lower than the 8.7% increase in August.
China’s ag ministry raised its corn production estimate by 2.75 MMT to 275.31 MMT, which would be up 2.76 MMT (1.0%) from last year. The ministry left its 2022-23 corn import forecast at 18 MMT, which would be down 4 MMT (18.2%) from last year. It also maintained its 2022-23 soybean import forecast at 95.2 MMT, which would be up 4.18 MMT (4.6%) from 2021-22.
France’s ag ministry raised its 2022-23 French wheat export forecast outside the EU by 100,000 MT to 10.1 MMT, which would be up 15% from last year. The ag ministry trimmed its French wheat export forecast within the bloc 60,000 MT to 7.07 MMT, which would be down 12% from 2021-22.
China will auction 40,000 MT of state-owned wheat reserves on Oct. 19. It held a similar auction today, from which results are unknown.
Romania has confirmed an outbreak of African swine fever (ASF) at a large pig farm in the western county of Timis. A Romanian official said, “A priority is to protect two other farms, each with tens of thousands of pigs, located a few kilometers away.”
Malaysia’s September palm oil inventories rose to the highest in nearly three years as a pick-up in production offset strong exports, data from the Malaysian Palm Oil Board showed. Stockpiles are forecast to rise 8.2% to 2.5 MMT by the end of October as higher production overrides rising exports, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.
Taiwan bought 65,000 MT of corn that is expected to be sourced from Brazil. Algeria purchased between 480,000 and 510,000 MT of milling wheat that is expected to be sourced mostly from Russia but also some from Romania and Bulgaria.
CORN: USDA late Tuesday said 31% of the U.S. corn harvest was complete as of Sunday, up from 20% the previous week and slightly ahead of the 30% average for that date the previous five years. Progress fell short of analysts’ expectations at about 34%.
SOYBEANS: USDA reported the U.S. soybean crop was 44% harvested at the start of this week, up from 22% a year earlier and ahead of the 38% five-year average. Progress topped expectations for 41% completion.
WHEAT: USDA said 55% of the winter wheat crop was planted at the start of this week, up from 40% a week earlier but behind the 58% average for the past five years. Progress matched trade expectations.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE: Live cattle may gain support from strengthening charts and expectations tight animal supplies will continue to underpin the cash market and wholesale beef. Beef packer processing margins turned negative Tuesday, the first time they have been below breakeven since 2018. Despite the negative margins and heavy carcass weights, packers are expected to stay relatively active in cash negotiations as market-ready supplies will continue to tighten in 2023. Wholesale beef prices appear to be stabilizing following a weeks-long slide, indicating firm demand. Choice beef cutout values rose $2.12 Tuesday to $246.75 on strong movement of 145 loads.
December live cattle rose $1.40 Tuesday to $148.40, the contract’s highest closing price since Sept. 22.
HOGS: Lean hog futures face a mixed outlook amid conflicting signals from the cash market. The CME lean hog index is down 3 cents today to $92.95 (as of Oct. 10) after gaining 33 cents the previous day. While the cash index may struggle to firm as supplies rise seasonally, recent price action suggests the cash market has stabilized, and it’s possible the market could put in an early seasonal low. Wholesale pork continued to strengthen, as cutout values rose $1.76 Tuesday to $103.15, near a three-week high. Movement was strong at 334 loads. December hogs fell 7.5 cents Tuesday to $79.525.