GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 5 to 7 cents higher.
Wheat: Winter wheat 8 to 10 cents higher; HRS 6 to 8 cents higher.
GENERAL COMMENTS: Wheat continues to show relative strength, helping pull both corn and beans higher in the overnight session. Modest selling sent corn and beans off overnight highs into the break. Front-month crude oil futures continue to bounce from this week’s 16-month low. The U.S. dollar index is trading narrowly around unchanged, but is still trading near 3-week highs.
USDA reported daily sales of 118,626 MT of corn for delivery to unknown destinations during the 2024-25 marketing year.
Producer price inflation (PPI) came in hotter than expected in August, rising 0.2% month-over-month, above expectations of 0.1% and a downwardly revised flat reading in July. Prices of services continue to lead PPI higher. Year-on-year, producer prices rose 1.7%, down from a downwardly revised 2.1% in July and below forecasts of 1.8%. While the monthly reading was higher than expected, downwardly revised figures for prior months kept yearly producer inflation low.
USDA will update its corn and soybean crop estimates at 11:00 a.m. CT, which will include its first objective field data. Analysts expect little change to those crop estimates from the initial forecasts last month, with the average pre-report estimates at 15.076 billion bu. for corn (15.147 billion bu. in August) and 4.589 billion bu. for soybeans (unchanged from August). Analysts expect slightly smaller corn and soybean ending stocks estimates for 2023-24. For 2024-25, projected ending stocks are expected to decline for corn and wheat, while a modest increase is anticipated for soybeans.
Conab inched up its 2023-24 Brazilian corn crop estimate by 70,000 MT from last month to 115.72 MMT. The Brazilian soybean crop estimate remained at 147.38 MMT, which remains well below USDA. Conab left its 2023-24 export forecasts at 92.4 MMT for soybeans and 36 MMT for corn.
Hurricane Francine weakened after slamming into the coast of southern Louisiana on Wednesday evening, taking a slightly more easterly route than previously expected. As of early this morning, U.S. National Hurricane Center downgraded Francine to a tropical storm and said it could be downgraded further to a tropical depression by late today. Heavy rains are expected across the Delta and Southeast, with some of the rainfall likely to move into the southeastern Corn Belt by Friday. Several port locations have been shuttered with Port Fourchon, Louisiana, closed to vessel traffic along with ports of New Orleans, Plaquemines, Cameron, Lake Charles and Houma. Barges traffic has also been interrupted, with Mike Steenhoek of the Soy Transportation Coalition noting that companies are not sending barge flotillas into the region until the storm has passed.
Export sales for the week ended September 5:
Corn: Net sales totaled 666,500 MT for 2024-25, which were below expectations. Carryover sales of 1.454 MMT from 2023-24. Traders expected sales from 700,000 MT to 1.6 MMT for 2024-25. Exports of 826,000 MT. Sales and exports are both falling from recent weeks.
Soybeans: Net sales totaled 1.474 MMT for 2024-25. Increases came primarily for China. Carryover sales of 953,800 MT from 2023-24. Sales were at the upper end of expectations ranging from 900,000 MT to 1.6 MMT for 2024-25. Exports of 463,500 MT.
Wheat: Net sales of 474,900 MT for 2024-25, up 40% from the previous week and 11% from the four-week average. Sales were within expectations of 300,000 to 550,000 MT for 2024-25. Exports totaled 542,200, in line with the four-week average.
CORN: December corn futures posted strong gains overnight. Prices overcame 40-day moving average resistance, which will mark initial support at $4.07 1/4. Further selling would find support at $4.04 1/4. Resistance lies at $4.12 3/4.
SOYBEANS: November soybean futures continue to trade in an apparent bull flag on the daily bar chart. Resistance stems from $10.13 then the 40-day moving average at $10.17 3/4. Support lies at the psychological $10.00 mark then yesterday’s low at $9.95 1/2.
WHEAT: December SRW futures continue to lead strength. Prices forged a fresh for-the move high overnight. Initial resistance stems from $5.94, which is reinforced by the psychological $6.00 mark. Selling pressure finds support at $5.80 3/4 then the 10-day moving average at $5.70.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone in a continuation of yesterday’s strength. October live cattle futures continue to show robust support near $175.00, marking that area as a near-term low. Feedlots in the Southern Plains reportedly passed on $1.00 lower bids from packers on Wednesday, sparking speculation the six-week drop in cash cattle prices may be coming to an end. Reports of higher cash trade could quickly translate into a corresponding gain in futures. Wholesale beef prices continue to slip, with Choice cutout dropping 87 cents to $307.36 and Select sinking $2.63 to $294.38 Wednesday. USDA reported net beef sales of 11,400 MT for 2024, down 31% from the previous week and 41% from the four-week average.
HOGS: Lean hog futures are expected to open with a mostly firmer tone in a continuation of yesterday’s technical strength, but waning cash fundamentals could limit gains after the open. The CME lean hog index is down another dime to $85.46 as of Sept. 10, the lowest level since April 2. Pork cutout dropped $1.89 to $92.91 on Wednesday, the lowest mark since March 21. All cuts except bellies posted losses on the day, but movement remained quite strong at 376.06 loads, showing robust retailer demand as prices have fallen. USDA reported net pork sales of 29,700 MT for 2024, up 43% from the previous week and 15% from the four-week average.