GRAIN CALLS
Corn: Steady to two cents lower.
Soybeans: 7 to 9 cents lower.
Wheat: SRW 3 to 5 cents higher; HRW steady to 2 cents higher; HRS 1 to 3 cents higher.
GENERAL COMMENTS: Corn and soybeans favored the downside overnight, though wheat futures saw continued strength. Outside markets continue to deteriorate due to continued weakness in the bond market, which has the 30-year treasury fetching over 4.81% (the highest since 2007), and U.S. equities trading near the lowest level since June. Volatility continues to run high, and grains are at continued risk of spillover volatility from outside markets. Front-month crude oil futures are trading near unchanged and the U.S. dollar index is nearly 300 points higher to the highest level since Nov. 2022.
Commodity brokerage firm StoneX estimates the U.S. corn crop at 15.202 billion bu. on an average yield of 175.5 bu. per acre. That is up from the firm’s September forecasts of 15.102 billion bu. and a yield of 175 bu. per acre. In September, USDA estimated the corn crop at 15.134 billion bu. on a yield of 173.8 bu. per acre. StoneX estimates the U.S. soybean crop at 4.175 billion bu. on a yield of 50.4 bu. per acre. That is up from its September forecasts of 4.144 billion bu. and 50.1 bu. per acre. In September, USDA estimated the soybean crop at 4.146 billion bu. on a yield of 50.1 bu. per acre. StoneX says the estimates are for USDA’s final production number and assume USDA’s harvested acreage.
Crop consultant Dr. Michael Cordonnier made no changes to his U.S. corn and soybean crop forecasts this week. He estimates the corn crop at 14.93 billion bu. on a yield of 171.5 bu. per acre. Cordonnier estimates the soybean crop at 4.05 billion bu. on a yield of 49 bu. per acre. He has a neutral bias toward both crops moving forward.
In many countries, the combination of higher rates, a stronger U.S. currency and elevated oil prices is threatening lower growth and more financial vulnerability. The U.S. dollar index has reached its highest level since November 2022. Investors have grown more convinced of the U.S. economy’s resilience — and that the Federal Reserve is likely to keep borrowing costs higher for longer than it would do in a typical business cycle, the Wall Street Journal notes.
This morning, the USDA announced sales of 220,000 MT of soft red winter wheat and 265,000 MT of corn for delivery to China during the 2023-24 marketing year.
CORN: December corn futures traded in a tight range overnight, though favored the downside. Bulls continue to struggle with resistance at the 40-day moving average, which is currently at $4.88 1/2. Additional significant resistance is unlikely to surface until the $4.99 mark. Bears are seeking to break $4.85 support, backed by $4.82 1/4, then last Friday’s low of $4.75 1/2.
SOYBEANS: November soybean futures saw selling pressure overnight, though Monday’s low of $12.65 3/4 provided some relief to the selling pressure. Bears are targeting the June 28 low at $12.56 3/4. Initial resistance stands at $12.79 1/2 and is backed by $12.94.
WHEAT: December SRW futures continued higher overnight, though stalled near initial resistance of $5.74 1/4. Additional resistance comes in at $5.80, while nearby support stands at $5.64 3/4, with bears ultimately targeting the contract low of $5.40.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open mostly lower, though some corrective buying is not unlikely as price remains in the lower end of the range that has contained price action the past two and a half weeks. The average cash cattle price fell $1.09 from the prior week to $183.64 and are expected to soften again as packers have fresh contracted supplies. Wholesale beef prices remain supported as Choice finds retail demand near the $300.00 level, as Choice rose $2.30 to $303.08 on Monday and Select rose 94 cents to $276.98.
HOGS: Lean hog futures are expected to open mostly lower as cash fundamentals continue to weaken. The CME lean hog index saw a slight bounce through most of September, which is the norm, though the rally ended without much of a bullish effect on the market. The CME lean hog index dropped 74 cents to $84.84 to the lowest level since June 9. The seasonal downturn is expected to continue through at least early winter, evidenced by the December contracts steep $15.34 discount to the index. Wholesale pork prices fell $1.19 to $96.04 on Monday, the lowest level since Sept. 7.