GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 2 to 4 cents lower.
Wheat: SRW 6 to 8 cents lower; HRW 4 to 6 cents lower; HRS 3 to 5 cents lower.
GENERAL COMMENTS: Wheat led losses overnight with corn and soybeans following to the downside. Soybeans remain in a precarious position as yesterday’s price action indicated a potential bearish reversal, which would be confirmed with continued selling pressure today. Outside markets are favorable this morning as front-month crude oil futures are boasting modest strength while the U.S. dollar index is trading around 50 points lower.
USDA reported daily export sales of 136,000 MT of corn for delivery to Mexico and 116,000 MT of soybeans for deliver to China—each in the 2024-2025 marketing year.
China’s grain output is set to exceed a record 700 million metric tons this year, a top agriculture ministry official said, up approximately 0.7% from last year. However, China remains highly reliant on soybean imports, while corn plantings continue to fall short of needed levels. “National food supply and demand is in a tight balance, with no substantial change, and so efforts to ensure a stable and safe supply of grains cannot be relaxed,” the official said. State stockpiler Sinograin would increase the scale of its corn purchases, which would help boost both farmer income and planting, helping China ensure national food security. The ministry also plans to develop high-oil and high-yielding soybean varieties and measures for soybean processing subsidies and stockpiling acquisitions.
Russia’s tax on wheat exports jumped to 2,272.9 rubles ($23.53) per metric ton for the week of Oct. 30-Nov. 5 up from 2,121.2 rubles ($21.96) the previous week. The export tax has surged 71.1% the last three weeks and is 151% above the mid-September level. Russia’s ag ministry has reportedly asked exporters to not sell wheat below a minimum price of $250 per metric ton. The tax hikes are seen as a way to curb wheat exports.
An E. coli outbreak has led to a sweeping onion recall. Federal regulators suspect the slivered onions used in McDonald’s Quarter Pounders were the contamination source, though investigations are ongoing. Taco Bell, KFC, Burger King and Pizza Hut have removed onions from some menu items as a precaution. Taylor Farms, the onion supplier to McDonald’s across 10 states, issued a recall of several yellow onion products. Meanwhile, McDonald’s has suspended Quarter Pounder sales in affected states.
CORN: December corn futures saw profit-taking overnight. Gains stopped shy of the 100-day moving average at $4.22 1/4 Thursday, which stands as initial resistance. Continued strength finds resistance at $4.25. Support comes in at $4.14 1/2, the 10-day moving average, then $4.10.
SOYBEANS: November soybean futures continued lower overnight. Bulls are looking to overcome initial resistance at $9.94 3/4 before tackling psychological $10.00 resistance. Support comes in at the overnight low of $9.86 1/4 then the psychological $9.75 mark.
WHEAT: December SRW futures led profit-taking efforts overnight. Prices failed to overcome downtrend resistance at $5.81, which coincides with the 10-day, 20-day and 40-day moving averages and remains strong resistance. Support comes in at $5.72 1/4 then the Oct. 22 low of $5.65 3/4.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open higher in a continuation of Thursday’s strength. December live cattle futures marked a three-and-a-half month high on Thursday, driven by reports of cash cattle trade picking up at mostly $2.00 higher prices, extending the string of weekly gains in the cash market to seven. Beef cutout dipped on Thursday, the first sign of a potential turnaround in Choice beef. Choice cutout fell 24 cents to $321.17 and Select sunk $1.43 to $294.34. Packers have taken advantage of margins in the black by actively building slaughter inventories, but a slowdown in the beef market could limit further cash gains. USDA will release its monthly Cattle on Feed and Cold Storage Reports this afternoon after the close.
HOGS: Lean hog futures are expected to open with a mostly firmer tone on continued strength in cash fundamentals. While December futures saw profit-taking on Thursday, the underlying cash market continues to firm contra-seasonally, as the CME lean hog index is up another 54 cents to $85.20 as of Oct. 23, the fifth consecutive day of gains. That is the longest string of gains since July when the index was rising to its seasonal peak on Aug. 1. Pork cutout dipped 7 cents to $98.15 Thursday, but movement remained strong at 337.15 loads. Losses in bellies led cutout lower. USDA will release its monthly Cold Storage Report after the close. The five-year average is nearly a 1-million-lb decline in pork stocks during the month of September.