GRAIN CALLS
Corn: 5 to 6 cents lower.
Soybeans: 13 to 15 cents lower.
Wheat: 11 to 17 cents lower.
GENERAL COMMENTS: Corn, soybean and wheat futures fell overnight and are all on track for weekly losses amid a U.S. dollar surge and renewed optimism over a Ukrainian grain export extension. Malaysian palm oil futures rose 0.1% and posted a 7% gain for the week as the arrival of the monsoon season raised production concerns. Front-month crude oil futures are little changed. U.S. stock index futures signal a weaker open, while the U.S. dollar index is up nearly 500 points.
Turkish President Tayyip Erdogan said he sees no obstacles to extending the deal allowing Ukrainian Black Sea grain exports, after discussions with his Russian and Ukrainian counterparts this week. “There is no obstacle to extending the export deal,” citing recent talks with Ukrainian President Volodymyr Zelenskyy and with Russian President Vladimir Putin, NTV reported. Erdogan’s remarks struck a more upbeat tone than that from Russian officials this week. The situation likely will continue to ebb and flow right up until, and maybe beyond, the Nov. 19 deadline on the current grain export deal.
The U.S. Plains faces a “unique opportunity” for significant rain in some important winter wheat production areas late this weekend and early next week, World Weather Inc. said today. Moisture from Tropical Cyclone Roslyn may contribute to “significant” moisture in Oklahoma, north-central Texas and southeastern Kansas, with rains of 1 to 3 inches possible. “However, the remaining (HRW wheat) production area is expected to be largely missed,” the forecaster said.
Yields on 10-year U.S. government Notes rose to their highest level since late 2007 on Friday, as Federal Reserve officials kept up their strong rhetoric on inflation. The 10-year Treasury yield hit 4.291%, a level last seen in December 2007.
China’s yuan continued to weaken against the U.S. dollar, approaching lows hit during the global financial crisis of 2008. The yuan hit an intraday low of 7.2479, not much above the 14-year low of 7.2521 hit in late September.
Farmers balking at the high costs of nutrients are holding off on purchases, driving down demand and causing gluts that are upending the market for crop inputs, Bloomberg reports. Prices soared to a record earlier this year after sanctions against Belarus, a major producer, and Russia’s invasion of Ukraine. That prompted global fertilizer firms to boost purchases and transport massive amounts of product to avoid supply chain issues and trade restrictions in export markets such as Russia.
India will refrain from increasing duties on palm oil imports as it wants to avoid a surge in domestic prices at a time when inflation is running hot, Bloomberg reported, according to a person familiar with the matter. Reuters reported this week that India was examining whether to raise import taxes on palm to support millions of local oilseed farmers. India’s basic import duty on crude palm oil is currently zero, while the tax on refined varieties of palm oil and palm olein is 12.5%.
French farmers had sown 46% of the expected soft wheat area for next year’s harvest by Oct. 17, compared with 36% last year at this time. Mild weather has allowed planting to rapidly advance. While rains this week may slow planting, the moisture should benefit the emergence of crops and somewhat ease water deficits following summer drought.
Turkey initially purchased around 395,000 MT of milling wheat in a tender for 495,000 MT. Additional purchases are possible.
CORN: December corn traded within the previous day’s range overnight after dropping slightly under the 40-day moving average at $6.80. The contract is down from $6.89 3/4 at the end of last week. Traders will continue to closely monitor low water levels on the Mississippi River that have slowed grain shipments into export markets.
SOYBEANS: November soybeans traded within the previous session’s range overnight after falling slightly below the 20- and 10-day moving averages at $13.83 3/4 and $13.82 1/4, respectively. The contract is up from $13.83 3/4 at the end of last week and on track for its third straight weekly advance.
WHEAT: December SRW wheat overnight fell as low as $8.33, just above the week’s low of $8.32 3/4 and down from $8.59 3/4 at the end of last week. Winter wheat technicals have continued to erode and further declines may have bears targeting $8.00 and the September low of $7.91 1/4.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-mixed
CATTLE: Live cattle futures may extend this week’s rally behind cash prices that are heading for the highest levels in seven years as traders wait for USDA’s Cattle on Feed Report after the close. Feedlots secured $148 for cash cattle in the Southern Plains and $152 in the northern market on Thursday. Trading volume was active, as expected amid the sharply higher prices, as packers didn’t wait to secure cattle amid tightening supplies. Through Thursday morning, USDA-reported live steers averaged $149.89, up from last week’s average of $146.99. Choice beef cutout values rose 23 cents Thursday to $253.62, the highest since Sept. 13. Movement was strong at 178 loads.
USDA’s Cattle on Feed Report this afternoon is expected to show the Oct. 1 feedlot inventory down 104,000 head (0.9%) from year-ago, which would be the first year-over-year decline since December 2021. Placements are expected to have declined 3.6% in September, while marketings are anticipated to have increased 4.0% from year-ago.
HOGS: Lean hog futures face a mixed open with cash fundamentals firming but prospects for a continuation of Thursday’s corrective selling. Spring- and summer-month lean hog futures shook off corrective selling pressure to end slightly higher Thursday, despite being short-term overbought. While seasonal weakness is likely for winter-month contracts, the longer-term outlook leans bullish as supplies will tighten and Chinese demand for pork is expected to improve. Far-deferred hog futures are still well below their 2022 highs, suggesting there’s more upside potential longer-term. Today’s CME lean hog index is expected to rise 56 to $93.76. December lean hogs fell 35 cents Thursday to $87.0250, the contract’s first decline in five sessions.