GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: Steady to 2 cents higher.
Wheat: 4 to 6 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each posted corrective gains overnight, though corn and soybeans fell near unchanged into the break. Soybeans are trading near the mid-October lows, which will be a key technical level today on continued selling pressure. Outside markets are mixed this morning as front-month crude oil futures are posting corrective gains following yesterday’s rout and the U.S. dollar index is trading around 300 points higher and near the highest mark in three months.
USDA’s initial winter wheat conditions rated the crop 38% “good” to “excellent,” down nine points from last year and the second lowest on record behind two years ago. The amount of crop rated “poor” to “very poor” was 23%, up five points from last year. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop started the growing season with a 293.8 rating, down 24.9 points from last year and 22.8 points below the five-year average. The initial SRW CCI rating was 356.4, down 13.5 points from last year and 1.2 points below the five-year average. Click here for details.
South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop estimates at 165 MMT for soybeans and 125 MMT for corn as needed rains fell on central production areas with more expected this week. Cordonnier says the strong soybean planting progress over the past week, especially in Mato Grosso, means less safrinha corn will likely be planted after the ideal window. Cordonnier kept his Argentine crop estimates at 57 MMT for soybeans and 48 MMT for corn.
Ukrainian farmers had seeded 4.68 million hectares of winter grains for harvest next year as of Oct. 28, or 90.2% of the expected area of 5.19 million hectares, the agriculture ministry said. That included 4.13 million hectares of winter wheat, or 92.2% of the projected area, along with 486,100 hectares of winter barley and 66,000 hectares of rye. Ukraine’s state weather forecasters said last week that most of the country’s winter crop was under-developed due to drought.
CORN: December corn futures saw modest corrective strength overnight. Bulls are looking to overcome 40-day moving average resistance at $4.13 1/4, which capped gains overnight. Support comes in at yesterday’s low of $4.10 then $4.06 3/4.
SOYBEANS: November soybean futures traded higher on corrective strength most of the overnight session. Initial resistance stems from $9.80 1/2, the overnight high, which is reinforced by the 10-day moving average at $9.87 3/4. Bulls are seeking to hold support at $9.73 1/2, which is backed by the Oct. 17 low of $9.68 1/4.
WHEAT: December SRW futures bounced from downtrend support overnight. Bulls are seeking to build on early momentum to overcome initial resistance at $5.65 3/4, which is reinforced by the 10-day moving average at $5.73 1/4. Support comes in at $5.57 then the psychological $5.50 mark.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open higher on continued fundamental and technical strength, though profit-taking could limit gains after the open. Last week, the cash cattle average climbed another $2.44 to $190.05, the seventh consecutive weekly gain and the highest price since early August. Strong packer margins are likely to continue to underpin cattle prices, but fresh contracted supplies and hefty purchases the past couple of weeks could limit packer demand for cattle this week. Cutout was mixed on Monday, though Choice beef continued to climb, rising $1.26 to $323.50. Select dipped $2.90 to $292.18, widening the Choice/Select spread to $31.32.
HOGS: Lean hogs are expected to open higher as contra-seasonal cash fundamental strength continues to support futures. December futures climbed to a contract high on Monday as the CME lean hog index continues to rise despite late-October being a historically weak period. The CME lean hog index is up another 12 cents to $85.55 as of Oct. 25, the seventh consecutive daily gain. During that span, the index has firmed $1.69. Pork cutout posted strong gains Monday, rising $3.01 to $101.95, the highest level since Aug. 6. Every cut posted gains, with loins, bellies and picnics leading the way higher. Cutout rising despite movement slowing to 262.93 loads indicates retailer demand is currently stronger than supply.