Ahead of the Open | October 30, 2023

Soybeans traded mostly higher overnight though sellers gained steam into the break, sending soybeans, corn and wheat into the break near session lows.

Pro Farmer's Ahead of the Open
Pro Farmer’s Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: Steady to 2 cents lower.

Soybeans: Steady to 2 cents lower.

Wheat: SRW 6 to 8 cents lower; HRW 9 to 12 cents lower; HRS 5 to 7 cents lower.

GENERAL COMMENTS: Soybeans traded mostly higher overnight though sellers gained steam into the break, sending soybeans, corn and wheat into the break near session lows. Outside markets were mixed, as treasury bonds continued recent weakness, pushing the 10-year treasury above 4.90%. Front-month crude oil futures favored the downside, as did the U.S. dollar index, which is trading over 315 points lower.

Rain prospects have improved for this week in dry areas of center-west and northeastern Brazil, according to World Weather Inc. After rains last week, growing conditions are also improved across much of Argentina. Meanwhile, southern Brazil and southern Paraguay remain excessively wet, with flooding in some areas and more rains expected this week. Soybean planting in Brazil reached 40% done as of last Thursday, according to AgRural, behind last year’s 46% pace at that point. While some rains fell on dry areas of Mato Grosso over the past week, amounts and coverage levels were “irregular.”

Israel over the weekend announced it had entered a “second stage” of its war against Hamas and on Sunday said its ground operations in Gaza would intensify. Israeli Prime Minister Benjamin Netanyahu reiterated his intent to “destroy” the militant group after its Oct. 7 attack on Israel, which killed more than 1,400 people, mostly civilians. The UN will hold an emergency meeting today, where the UAE will seek a resolution on a “humanitarian pause” in the fighting, though Israel has vowed to continue its ground raids in the coming days.

Ukraine’s grain exports in October plunged 49.1% from year-ago to 2.15 MMT, according to the country’s ag ministry. Since July 1, Ukraine has exported 8.9 MMT of grain, down 4 MMT (31.0%) from last year. That total included 4.5 MMT of wheat, 3.6 MMT of corn and 679,000 MT of barley.

CORN: December corn futures continue to trade in a tight range, pivoting around the $4.80 mark. Bulls are seeking a daily close above $4.85, which has capped gains the past three sessions, to signal an interim low is in place, which is backed by $4.88 1/2. Bears are looking to close prices below $4.76 1/2 support, which is firmly backed by $4.74.

SOYBEANS: November soybean futures traded above $13.00 most of the overnight session, though sold below that mark into the break. This will stand as an important pivot this week. Resistance stands at $13.12 3/4, then the Oct. 20 high of $13.18 1/2. Bulls are seeking to hold support at $12.93 3/4, backed by last week’s low of $12.77 1/2.

WHEAT: December SRW futures fell overnight from week-long downtrend resistance. This initial resistance at $5.77 stands as the bulls’ first target, which is backed by the 40-day moving average at $5.87 1/2. Bears are looking to bring prices below initial support at $5.68 1/2, backed by last week’s low of $5.63 1/4.

LIVESTOCK CALLS

CATTLE: Higher.

HOGS: Choppy/higher.

CATTLE: Live cattle futures are expected to open with a mostly firmer tone in continuation of Friday’s strength. December futures are likely to test the prior support zone at $184.50. A close above this level would indicate last week’s weakness as a failed downside breakdown, a bullish technical pattern. Cash fundamentals strengthened in the latter half of last week, as packers raised cash bids late Friday in an apparent attempt to buy more cattle. Wholesale beef prices also proved firm on Friday, continuing last week’s strength, as Choice rose 72 cents to $307.57 and Select rose 43 cents to $280.12.

HOGS: Lean hog futures are expected to open mostly higher, though some profit taking is possible. Friday’s breakout from the steep six-week downtrend is likely to breed additional technical buying, though December futures have narrowed the gap to the cash index to just $7.475, the narrowest the spread has been since May. This may renew selling pressure as the sustaining bearish seasonal in the CME lean hog index, which fell 24 cents to $77.95 today (as of Oct. 26), is likely to continue into the December futures’ contract expiration. Meanwhile, wholesale pork prices rose 67 cents on Friday to $86.40, led by strength in hams and bellies.