GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: 8 to 11 cents lower.
Wheat: 8 to 8 cents higher.
GENERAL COMMENTS: Soybean futures fell near a two-week low overnight and corn also slipped amid pressure from the accelerating U.S. harvest. Winter wheat rose from four-week lows. Malaysian palm oil futures jumped 2.7% near a seven-week high on production concerns. Front-month crude oil futures are up more than $1. U.S. stock index futures point to a lower open, while the U.S. dollar index is up more than 700 points.
Periodic rains may reach the Midwest and Delta in coming days, but the runoff “is not likely to be enough to sustain a rise in river levels, although some minor fluctuations will continue,” World Weather Inc. said. U.S. HRW wheat areas will continue dry, at least in the western half of the region, while any moisture in eastern areas will be limited. Frost and freezes this morning reached deep into the Delta, ending the growing season for many areas a few weeks earlier than usual. Some crop damage is suspected, but the impact should be mostly a quality one for soybeans and peanuts, the forecaster said.
Russia’s defense ministry said Tuesday two of its Tu-95MS strategic bombers had conducted a flight of more than 12 hours over the Pacific Ocean, the Bering Sea and the Sea of Okhotsk. It described the mission as “a scheduled flight over neutral waters,” in line with international airspace rules. The ministry did not specify the route, but a flight path over the Sea of Okhotsk and the Bering Sea would have passed close to Japan and the United States.
Russia’s agriculture ministry has proposed setting the country’s grain export quota at 25.5 MMT from mid-February until the end of June, Interfax news agency reported. The quota is equal to the one proposed by the Russian Grain Union earlier this month, when it said such a level would be not restrictive to shipments.
Argentine grains producers have sold 70% of the 44 MMT 2021-22 soybean harvest so far, the country’s agriculture ministry said. A year earlier, producers had sold 68.4% of the harvest. Between Oct. 6 and 12, however, producers sold just 55,000 MT of soybeans, well below a weekly average of around 1.1 MMT in September, when a preferential exchange rate mechanism for soy exporters remained in effect.
South Korea passed on a tender to buy up to 95,000 MT of optional origin feed wheat but purchased 30,000 MT of optional origin feed barley. Pakistan tendered to buy 500,000 MT of optional origin wheat. Iraq tendered for a nominal 50,000 MT of optional origin (excluding Russia) hard milling wheat. Japan received no offers to its tender to buy 70,000 MT of feed wheat and 40,000 MT of feed barley.
CORN: December corn overnight dropped under the 40-day moving average and fell as low as $6.76 1/4 but held above Tuesday’s low at $6.74 1/2. Corn market technicals have eroded over the past week, and a close below this month’s low of $6.71 1/2 would negate a recent uptrend and could spur further fund liquidation.
SOYBEANS: November soybeans overnight fell as low as $13.58 1/2, the contract’s lowest intraday price since $13.50 3/4 on Oct. 7. A drop under the October low of $13.50 may have bears targeting $13.00 and the July low of $12.88 1/2.
WHEAT: December SRW wheat pushed above the 50-day moving average at $8.50 1/4 overnight but held within the previous day’s range. The contract fell 11 1/2 cents Tuesday to $8.49 1/2, the contract’s lowest close since $8.30 1/2 on Sept. 19.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-mixed
CATTLE: Live cattle futures may extend Tuesday’s climb to four-week highs on prospects for a third straight week of strengthening cash prices. Cash sources signaled some feedlots in Nebraska passed on bids in the $150 to $151 range, which were up from an average price of nearly $148 in the state last week. While there has been no significant sales yet, all indications point to solidly higher – and potentially sharply higher – cash cattle trade this week. Choice beef cutout values rose $2.64 Tuesday to a four-week high of $250.78 on strong movement of 135 loads. December live cattle rose 57.5 cents Tuesday to $149.775, the highest closing price since Sept. 21.
HOGS: Lean hog futures remain supported by strong technicals and firming cash fundamentals but could run into profit-taking and corrective selling. December futures have rallied $13.50 from an Oct. 4 low, with nearly $6.00 of that price surge coming the past three days. While cash fundamentals have perked up, the market is now short-term overbought, which could lead to some near-term corrective selling pressure. Traders’ longer-term attitudes seem to have shifted amid hopes China will buy more U.S. pork to tame its surging domestic prices. The CME lean hog index is down 16 cents to $93.19 after rising four of the previous six days. Pork cutout values fell 83 cents Tuesday to $102.67 on strong movement of 336 loads. December hogs surged $1.525 Tuesday to $86.475, the highest close since Sept. 20.
China will sell another 20,000 MT amount of pork from state-owned reserves on Oct. 21 – the sixth batch of pork released from state stockpiles. The National Development and Reform Commission said it would work on securing hog supplies and stabilizing prices, and continue to release pork reserves.