GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: Steady to 2 cents lower.
Wheat: Winter wheat 4 to 6 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Grains saw limited volatility overnight following Thursday’s surge, as corn, soybeans and wheat each traded on both sides of unchanged. The NFP miss to the upside (more below) sent risk assets lower this morning, evidenced by S&P 500 futures falling over 1.25% from session highs. The main concern for risk assets remains interest rates. The ten-year treasury shot higher on the report, now trading over 4.85% and near recent highs. The U.S. dollar index rallied on the report, now trading around 600 points higher, while front-month crude oil futures reversed from earlier lows and are posting mild gains.
The U.S. job market has proved robust, despite expectations that jobs would come in less than expected following the flailing ADP number earlier this week. The Labor Department reported that nonfarm payrolls (NFP) rose 336,000 jobs compared to an expected rise of 170,000 in September. July NFP was also revised 79,000 higher (157,0000 to 236,000) and August NFP was revised 40,000 higher (187,000 to 227,000). Traders were hoping for a miss to the downside, as a cooling labor market is one of the Federal Reserve’s targets. The labor market staying hot is a sign of potential additional tightening of monetary policy, including another likely rate hike.
Russian drones attacked port infrastructure in Ukraine’s Odesa region, damaging a grain silo near the Danube River. As we reported in “Evening Report” on Thursday, a Turkish-flagged general cargo ship hit a mine yesterday in the Black Sea off the coast of Romania and sustained minor damage.
Argentine corn plantings for 2023-24 could be less than intended if substantial rains don’t come soon the Buenos Aires Grain Exchange warned. In its weekly report, the exchange said, “Rain will be necessary over the next two weeks to meet planting goals.” The exchange also said one-third of the country’s 2023-24 wheat crop was rated poor/very poor due to dry conditions and recent frosts.
CORN: December corn futures pivoted near unchanged most of the night but saw weakness following this morning’s NFP miss. Initial resistance stands at the psychological $5.00 mark, backed by $5.06 1/4. Bulls are seeking to hold initial support at $4.89 1/4, a daily close below which would indicate a failed breakout on the daily bar chart, leading to a likely test of $4.82 1/2 support sooner than later.
SOYBEANS: November soybean futures favored the upside overnight but went into the break nearer session lows. Prices traded above initial resistance of $12.84 1/2 overnight but have since fallen back below the level. Additional resistance lies at the psychological $13.00 level. Bulls are seeking to hold support of $12.77, backed by $12.73.
WHEAT: December SRW futures surged on geopolitical tensions on Thursday but traded mostly lower overnight. Bulls are seeking to hold prices above $5.73 3/4 support, which is backed by $5.65. Bears are looking to hold 20-day moving average resistance, currently at $5.82. Additional resistance stands at $5.90.
LIVESTOCK CALLS
CATTLE: Mixed.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open mixed as the market attempts to bounce from sharp losses earlier this week. The technical posture in futures has turned bearish as prices have broken a five-month uptrend on the daily bar chart. This breakdown has been partially offset by the weekly average cattle price staying relatively steady, with the value currently at $182.51, up 45 cents from Wednesday, but down from an average of $183.64 last week. The slipping wholesale beef market, currently trading at the lowest level since last spring, will continue to weigh on futures as well. Choice cutout rose $1.00 to $297.76 on Thursday, while Select fell 10 cents to $274.77.
HOGS: Lean hog futures are expected to open mostly lower as corrective buying is likely overdone. December lean hogs have not closed higher three days in a row since early August and cash fundamentals continue to wane, indicating a price drop is likely. Wholesale pork prices have recently stabilized just under $95.00, which could support futures. The CME lean hog index fell 58 cents to $83.70 today (as of Oct. 4), marking a $2.80 premium to the soon-to-expire October contract and a $11.425 premium to most-active December futures.