GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 5 to 8 cents lower.
Wheat: Steady to 2 cents lower.
GENERAL COMMENTS: Overnight trade was fairly quiet, though corn and beans went into the break on the lows. Wheat is showing relative strength near unchanged. Outside markets are mixed, as front-month crude oil futures are trading on intraday lows and the U.S. dollar index is down about 50 points.
Traders expect the National Oilseed Processors Association (NOPA) to report processors crushed 167.8 million bu. of soybeans during August, which would be down 3.2% from July but up 1.4% from last year and the second highest figure on record for the month. Soyoil supplies held by NOPA members at the end of August are expected to total 1.483 billion pounds.
Japan will slash the price at which it sells imported wheat to domestic flour mills from October by an average 11.1% to reflect lower import prices. It marks the first drop in three years and reflects softer international wheat prices. Japan buys five types of milling wheat from the U.S., Canada and Australia through import tenders and sells to domestic millers at prices set twice a year. For the six months starting Oct. 1, the ministry’s wheat selling price to local millers will average 68,240 yen ($465) per metric ton, down from 76,750 yen the previous six months.
In the ongoing process of drafting a new farm bill, Senate Ag Chair Debbie Stabenow (D-Mich.) is considering changes to the federal crop insurance program that would benefit a wide spectrum of farmers. However, other committee members are advocating for a focus on producers of major commodity crops, sparking a contentious debate over subsidies within this legislation. The primary point of contention centers around subsidies in the face of budget constraints for farm and conservation programs.
China’s factory output and retail sales grew at a faster pace in August. Industrial output rose 4.5% from year-ago in August, the strongest growth since April. Retail sales increased 4.6%, the strongest growth since May. The upbeat data suggests recent measures to shore up the economy are starting to show impacts. But the real estate sector remains a concern. China’s new home prices fell at the fastest pace in 10 months in August, while property investment dropped for an 18th consecutive month and home sales slumped for a 26th straight month.
CORN: December corn futures continue to struggle taking out $4.82 resistance, though bulls have kept losses minimal. While prices are near downtrend resistance, that level is unlikely to be broken today. Bulls are seeking to hold $4.73 1/2 support, else a trip to $4.50 is likely in the near future.
SOYBEANS: November soybean futures saw selling pressure overnight as price was unable to overcome trendline resistance stemming from the August high. This resistance currently stands at $13.60, a daily close above which would encourage bulls that an interim low could be in place. Additional resistance stands at $13.71, while bulls are seeking to hold $13.42 support, backed by $13.51 1/4.
WHEAT: December SRW futures have shown resilience as price has hovered near 10-day moving average resistance for the past three sessions. This initial resistance, currently at $5.97 1/2, marks the first hurdle in bulls establishing an interim low. Additional resistance comes in at $6.10, while bulls are seeking to defend $5.83 1/2 support, backed by $5.70.
LIVESTOCK CALLS
CATTLE: Mixed/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open mostly higher, though some profit-taking is possible after front-month futures have made a new all-time high on Thursday. Higher cash trade in the northern market spurred Thursday’s futures rally, but October futures continue to hold a premium to the current cash average of $183.81. This could limit buying, though tight market ready supplies and recent strength in cash trade should limit the downside as well. Wholesale values continue to fall, though daily losses remain fairly small. Choice cutout fell $1.18 to $306.37 on Thursday while Select fell 33 cents to $286.86. The Choice/Select spread was at the tightest level since June, with yesterday’s mark at $19.51.
HOGS: Lean hog futures are expected to open mostly higher as prices have tested trendline support the past couple days. This technical support paired with recent strength in the CME lean hog index, which rose 46 cents to $86.94 today (as of Sep. 13), will likely give the bulls momentum to thwart recent selling efforts. Wholesale prices have stabilized near $100.00 for the time being, with Thursday’s quote rising 87 cents to $99.09, though individual cuts are still seeing moderate volatility as the summer grilling season winds down.