GRAIN CALLS
Corn: 1 to 2 cents higher.
Soybeans: 3 to 4 cents lower.
Wheat: 9 to 12 cents higher
GENERAL COMMENTS: Corn and wheat futures firmed overnight amid corrective buying. Soybeans traded higher through much of the overnight session but eased late to near 2 1/2-month lows. Malaysian palm oil futures rose 3.8%, the seventh straight daily gain, to cap a 12% weekly rally. Front-month crude oil firmed nearly $1, hitting the highest level in over three weeks. U.S. stock index futures signal a lower open and the U.S. dollar index is up about 300 points.
U.S. employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%, underscoring the tight labor market and the likelihood the Federal Reserve will continue its aggressive monetary policy tightening efforts. Non-farm payrolls increased by 263,000 jobs last month, the Labor Department reported. Economists polled by Reuters on average forecast 250,000 payrolls gains. The unemployment rate during September fell to 3.5% from 3.7% in August.
La Nina “continues strong and its influence on the world remains significant; however, the event is very near its peak of intensity,” World Weather Inc. said today. Argentina will continue drought stricken through the next 10 days with little to no rain expected, the forecaster said. Center-west Brazil needs greater rain, but scattered showers are expected soon. Center south Brazil will be wettest over the next 10 days with waves of rain maintaining concern over wheat quality in the interior south of Brazil. “Planting progress in early corn, soybean, rice and cotton areas will be a little slow at times because of the rain, but progress should advance well,” World Weather said.
The UN Food and Agriculture Organization (FAO) global food price index fell another 1.1% in September, the sixth straight monthly decline, though it was 5.5% above year-ago. The decline last month was driven by a sharp fall in prices of vegoils and moderate decreases in sugar, meat and dairy, which more than offset a rise in cereal grain prices.
Conagra Brands Inc. expects the soaring transportation and raw-material costs that have helped drive up food prices over the past year will moderate in the coming months, company officials said. Sean Connolly, Conagra’s chief executive, said the cost of some meats, edible oils and shipping expenses are starting to ease, bringing some relief to companies’ balance sheets.
Minneapolis Fed President Neel Kashkari, who is typically considered one of the more dovish members of the central bank, said he sees “almost no evidence that underlying inflation is coming down.” As such, he is “not comfortable saying we are going to pause” hiking rates.
FAO cut its 2022-23 global cereal grain production to 2.768 billion MT, down 5.9 MMT (0.2%) and now 1.7% below its estimate for 2021-22. FAO’s projected global stocks-to-use for 2022-23 is now 29.7%, down from 31.0% in 2021-22 but still relatively high historically.
Ukrainian farmers have completed this year’s wheat and barley harvests, according to the country’s ag ministry, which produced 19.2 MMT of wheat and 5.5 MMT of barley. Wheat production fell 13 MMT (40.4%) from last year, while the barley crop was 3.9 MMT (41.5%) smaller.
Russia’s wheat export tax for Oct. 12-18 will be 1,926.8 rubles ($31.42) per MT based on an indicative price of $307.70. That’s down from a rate of 2,119.0 rubles per MT the previous week and the ninth straight weekly decline.
CORN: December corn firmed 1 1/2 cents overnight after dropping 8 1/2 cents Thursday to $6.75 1/2, the contract’s lowest close since Sept. 29, and is down from $6.77 1/2 at the end of last week.
SOYBEANS: November soybeans remained within Thursday’s range overnight and near a 2 1/2-month intraday low of $13.50. The contract is down from $13.64 3/4 at the end of last week.
WHEAT: December SRW wheat firmed 10 1/4 cents overnight but traded within the previous day’s range after sinking 23 cents Thursday to $8.79, the contract’s lowest closing price since Sept. 27. The contract is down from $9.21 1/2 at the end of last week, on track for its first weekly decline in three.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firmer
CATTLE: Live cattle may gain support from firmness in cash and signs of solid beef demand. USDA reported live steers averaged $145.93 through Thursday morning, up from last week’s $144.78 average. Choice beef cutout values rose 30 cents to $247.36 on strong movement of 208 loads. Despite the cash strength, live cattle futures have traded mostly sideways this week, with the strong dollar and economic uncertainty raising concern over meat demand. December live cattle fell 5 cents Thursday to $147.875, up from $147.05 at the end of last week.
HOGS: Lean hog futures may gain support from signs cash fundamentals are stabilizing following a recent slump. Wholesale pork prices continued to strengthen after slumping during the last half of September. Pork cutout values rose $2 Thursday to $101.20, as gains of over $6 each in hams and bellies helped drive the highest daily average in nearly two weeks. We don’t expect a sustained rally in cutout values as the market works through the heaviest slaughters of the year through the fourth quarter, there appears to be solid underlying retailer demand below $100.00. The CME lean hog index is down 16 cents to $92.77, near an eight-month low.
December lean hogs rose $1.275 Thursday to $77.775, the highest close since Sept. 26 and up from $76.225 at the end of last week.