GRAIN CALLS
Corn: Steady to 1 cent lower.
Soybeans: 6 to 7 cents lower.
Wheat: 3 to 9 cents higher.
GENERAL COMMENTS: Winter wheat futures rose to 2 1/2-month highs overnight as escalating tensions with Russia fueled concerns over grain supplies in the Black Sea region. Corn and soybean futures firmed initially but finished the overnight session slightly lower. Malaysian palm oil futures surged 4.1% on strong demand from top buyer India, while front-month crude oil futures are around $1.50 higher. U.S. stock index futures signal a firmer open and the U.S. dollar index is around 500 points higher.
Russian President Vladimir Putin ordered Russia’s first mobilization since World War II and backed a plan to annex swaths of Ukraine. He also warned the U.S. and its western allies he would be prepared to use nuclear weapons to defend Russia. Citing NATO expansion towards Russia’s borders, Putin said the West was plotting to destroy his country, engaging in “nuclear blackmail” by allegedly discussing the potential use of nuclear weapons against Moscow, and accused the U.S., European Union and Britain of encouraging Ukraine to push military operations into Russia itself. “If the territorial integrity of our country is threatened, we will without doubt use all available means to protect Russia and our people – this is not a bluff,” Putin said in a televised address to the nation. Putin signed a decree on partially mobilizing Russia’s reserves, arguing that Russian soldiers were effectively facing the full force of the “collective West,” which has been supplying Kyiv’s forces with advanced weapons, training and intelligence. Russian Defense Minister Sergei Shoigu said Russia would draft some 300,000 additional personnel.
The Federal Reserve later today is expected to hike its benchmark funds rate by 75 basis points for the third consecutive time as the central bank continues aggressive efforts to rein in soaring inflation. A 75- basis-point increase would lift the federal funds rate to a new target range of 3% to 3.25%, though a 100-basis-point increase is possible.
Ukraine’s 2023 wheat crop may decrease to 16 MMT to 18 MMT, down from 19 MMT this year due to an expected fall in the winter wheat sowing area, first deputy agriculture minister Taras Vysotskyi said Tuesday. Ukrainian ag officials have said the area under winter wheat could fall by at least 20% due to Russian occupation of some areas of the country as farmers prefer to sow oilseeds that have stable export demand. The area sown to winter wheat for 2023 could total around 3.4 million hectares, 10.5% less than the ag ministry expected in late August, a report showed.
Ukraine’s grain exports are down 43% year-over-year so far in the 2022-23 at 6.88 MMT, the agriculture ministry said today. Ministry data showed that exports since July 1 included 3.95 MMT of corn, 2.30 MMT of wheat and 598,000 MT of barley.
Members of a Taiwanese trade mission signed letters of intent to buy between 96 million and 107 million bu. of soybeans and 59 million bu. of corn in 2023-24 at a ceremony in Iowa. Those purchases would be valued at around $2.6 billion.
India’s palm oil imports in 2022-23 could jump 9% from a year earlier on a rise in domestic consumption and as competitive prices allow the tropical oil to regain its share in the world’s biggest market, a Reuters survey showed. The stepped-up buying could help top producer Indonesia bring down ballooning inventories and support benchmark Malaysian palm oil futures, which have nearly halved from record highs earlier this year.
The Philippines tendered to buy 45,000 MT of optional origin feed wheat.
CORN: December corn faded late in overnight trading after earlier rising as high as $6.98 1/2, the contract’s highest intraday price since a 2 1/2-month high of $6.99 1/2 on Sept. 12. A push above the Sept. 12 high may trigger chart-based buying that sends December futures back above $7.00 for the first time since mid-June.
SOYBEANS: November soybeans faded after rising earlier in overnight trade to $14.88 3/4, the contract’s highest intraday price in a week.
WHEAT: December SRW wheat overnight pushed above the 200-day moving average around $9.14 1/2 and reached $9.19 1/2, the contract’s highest intraday price since $9.54 on July 11. December HRW futures hit $9.82, also the highest price since July 11.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-firmer
CATTLE: Live cattle futures may gain support from expectations for further cash market strength, but slumping wholesale prices may limit the upside. Choice beef cutout values dropped 81 cents Tuesday to $251.64, the lowest level since April 2021. While the Choice/Select spread is unusually wide due to tight Choice supplies, falling wholesale prices suggest packers are cutting prices to attract retailer buying. But with Choice-grading running well under the five-year average, there probably is limited downside price risk from current levels. October live cattle rose 57.5 cents Tuesday to $146.30, the highest settlement for a nearby contract since August 2015.
HOGS: Lean hog futures may gain support from signs of a bottom in the cash market. The national direct cash hog price firmed $5.01 on Tuesday. While the CME lean hog index is down 6 cents to $98.36 (as of Sept. 19), the direct market signals cash prices are still underpinned over the near-term, which should limit selling interest in nearby hog futures. Pork cutout values fell 70 cents Tuesday to $105.18 on strong movement of 347 loads. October lean hogs fell 50 cents to $95.975.