GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 14 to 16 cents higher.
Wheat: Winter wheat 3 to 6 cents lower; HRS steady to 2 cents lower.
GENERAL COMMENTS: Soybeans surged overnight, leading corn slightly higher as well. Wheat saw action on both sides of unchanged but favored the downside into the break. The Bureau of Labor Statistics released the personal consumption expenditures (PCE) price index for September this morning. Core PCE, the Federal Reserve’s preferred inflation measure, came in as expected rising 3.7% year-on-year, down from a 3.9% rise in August. Risk assets saw this as a non-event, though that could change after the open. Outside markets were mixed, as front-month crude oil futures favored the upside while the U.S. dollar index is trading near unchanged.
While soybeans have traded largely sideways this week along with soyoil, the surging soybean meal market has led crush sharply higher. January crush, which calculation includes soybean, soybean meal and soyoil futures, has risen nearly 60 cents (51%) from the October low, which will continue to incentivize crushers to operate at capacity over the coming months.
U.S. forces conducted airstrikes on two eastern Syria weapons and ammunition facilities associated with Iran’s Islamic Revolutionary Guard Corps and “affiliated groups” following attacks on U.S. personnel there and in neighboring Iraq, the Pentagon said late Thursday night. Oil prices rose on the news but other markets had a limited reaction.
Treasury Secretary Janet Yellen said U.S. third quarter economic growth of nearly 5% was a good sign the economy was headed for a soft landing but could also keep longer-dated bond yields elevated. “It’s a good strong number and shows the economy is doing well,” Yellen told Bloomberg. “What we have looks like a soft landing.” Yellen said the recent sharp rise in long-term bond yields is reflective of confidence in the U.S. economy and expectations that interest rates will be higher for longer as a result. She dismissed suggestions that higher bond yields may be due to worries about rising U.S. deficits or worries about a recession.
CORN: December corn futures saw slight corrective buying overnight but gains were limited by Thursday’s high of $4.84 1/4. Further buying is likely to find resistance at $4.87 1/4. Bulls are seeking to hold support at $4.79 1/4, else a trip to significant $4.74 support is likely.
SOYBEANS: November soybean futures saw sharp buying overnight breaking the recent downtrend stemming from last week’s highs. Bulls are targeting a daily close above the psychological $13.00 level, quickly backed by 40-day moving average resistance at $13.03 1/4. Bears are looking to take out support at $12.77 1/2, which is backed by $12.72 1/4. November soybean options expire today which will likely limit a move far from the $13.00 mark.
WHEAT: December SRW futures have traded in a tight downtrend for the last six sessions, buyer interest is likely to remain limited above the $5.80 mark today, though a close above that level would indicate the recent downtrend is negated. Additional resistance stands at the 40-day moving average, which capped gains last week, currently at $5.88 1/2. Bulls are seeking to hold $5.68 1/2 support, backed by $5.57.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone. After Monday’s heavy selloff, bulls have tried, largely unsuccessfully, to recoup some of the losses. While there have been solid intra-day gains the past three days, buyer interest has faded late. We expect futures to make another intra-day push to the upside today. Key will be how the market finishes ahead of the weekend. Cash cattle trade so far this week was at solidly lower prices, though trading volume was light as most feedlots passed. Packers began raising their cash bids on Thursday, suggesting increased interest. It still appears the average cash cattle price will be lower this week, but it might not be as weak as once expected. The impending cold front and winter storm across the Plains and upper Midwest could also be price-supportive.
HOGS: Lean hog futures are expected to open mostly higher riding the past two days’ bullish momentum. The CME lean hog index fell another 22 cents to $78.19 today (as of Oct. 25) as the index continues to fall seasonally, bringing futures within $10.00 of the index for the first time since Oct. 9. Traders may have realized that cheaper retail pork may draw more consumer interest than years past, limiting the fall in the index compared to 2021 and 2022. Wholesale pork prices fell $1.86 Thursday to $85.73, the lowest level since June, though movement remained robust at 302.19 loads.