GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 2 to 4 cents higher.
Wheat: Winter wheat 3 to 5 cents lower; HRS steady to 2 cents lower.
GENERAL COMMENTS: Wheat saw relative weakness overnight, pulling both corn and beans lower for most of the overnight session. Soybeans surged higher this morning and went into the break near session highs. Front-month crude oil futures are modestly higher this morning. The U.S. dollar index is over 700 points higher as bonds are sharply lower in the overnight session, increasing longer-dated interest rates, despite the Fed cutting rates yesterday afternoon. Ten-year interest rates have generally been trending lower but saw a sharp uptick this week, a trend that we will keep a close eye on.
The majority of soybean and grain exports from the Gulf or East Coast would not be impacted by a potential dock workers’ strike amid negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). Bulk grain export facilities typically operate with different labor arrangements, such as their own employees or different labor unions. However, the strike would impact exports such as soybeans, soymeal and other agricultural products exported via containers and indirectly affect grain producers through disruptions in the livestock industry.
Grain ships loaded with soybeans and corn at Argentina’s major inland river ports around Rosario are hauling less cargo as water levels drop to near record lows due to a major drought upstream in Brazil. The Parana River, which carries almost 80% of Argentina’s grains and oilseeds for export, is at the second lowest level for this time of year since 1970, behind only a major decline in 2021, data from the Rosario Grain Exchange showed. The head of the Chamber of Port and Maritime Activities (CAPyM) told Reuters ships are loading approximately 15% less cargo than normal, which is pushing up costs and transport times. The exchange said the low water levels looked unlikely to improve any time soon and this could mean dozens more ships than normal would be required for the remainder of the year to transport soybeans/soy products, corn and wheat.
Export sales for the week ended September 12:
Corn: Net sales totaled 847,400 MT for 2024-25, increases came primarily for Mexico, unknown destinations and Japan. Traders expected sales from 550,000 MT to 1.4 MMT for 2024-25. Exports of 572,900 MT. Sales rebounded from last week. Weaker sales at the start of the marketing year are not uncommon in corn.
Soybeans: Net sales totaled 1.748 MMT for 2024-25, above expectations. Increases came primarily for China, totaling 973,900 MT. Traders expected sales from 500,000 MT to 1.6 MMT for 2024-25. Exports of 446,200 MT. While sales have been strong, weaker shipments have been disappointing.
Wheat: Net sales of 246,300 MT for 2024-25, down 48% from the previous week and 46% from the four-week average. Sales were below expectations of 300,000 to 650,000 MT for 2024-25. Exports of 642,100 MT were a marketing year high.
CORN: December corn futures continue to trade in a tight range. Bulls are eyeing resistance at $4.15, which has capped most of the upside in the past three weeks. Support stems from $4.08 1/4, the 40-day moving average, then $4.04 1/4.
SOYBEANS: November soybean futures continue to be caught between 40-day moving average resistance (currently at $10.16) and 20-day moving average support (currently at $10.05 1/4). Strength finds resistance at $10.22, while a breakdown would find support at $9.97 1/4.
WHEAT: December SRW futures continue to undergo selling pressure. The 40-day moving average at $5.70 limited most losses overnight. Further selling eyes the Sept. 9 low of $5.60 1/2. Resurgent strength likely finds resistance at $5.74, the 10-day moving average, which is backed by resistance at $5.84 1/4.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone as the fundamental outlook looks shaky. Cash cattle trade has been light this week, too light to set a trend ahead of Friday’s Cattle on Feed Report. Packer margins recently moved into the black, but with beef prices sinking, they could be hesitant to raise cash bids again this week. Choice beef fell another $2.53 to $301.38 and Select dropped $2.47 to $289.75 on Wednesday. Without an uptick in prices, feedlots may hold out until after Friday afternoon’s Cattle on Feed Report to sell this week’s supplies. USDA reported net beef sales of 15,500 MT for 2024, up 36% from the previous week and 2% from the four-week average.
HOGS: Lean hog futures are expected to open with mostly weaker tone as discounts to the cash market have narrowed. While the CME lean hog index held steady at $84.22 as of Sept. 17, October futures are just $2.17 below the index, which could spur some corrective selling pressure barring relative strength in the cash market in the next couple of days. While historically the index tends to fall between now and the October contract’s expiration, there are instances where the cash market shows relative strength throughout the period. Pork cutout fell 59 cents to $94.41 Wednesday, led lower by bellies and picnics, though movement remains firm at 372.4 loads. USDA reported net pork sales of 29,000 MT for 2024, down 3% from the previous week but up 3% from the four-week average.