GRAIN CALLS
Corn: 4 to 6 cents higher.
Soybeans: 14 to 16 cents higher.
Wheat: 10 to 12 cents higher.
GENERAL COMMENTS: SRW wheat futures rose overnight and are on track for a third consecutive weekly gain as India’s restrictions on rice exports exacerbated concerns over tight global grain supplies. Corn and soybeans also rose as traders readied for Monday’s USDA Crop Production and Supply and Demand Reports. Malaysian palm oil futures ended higher but still fell 8.2% for the week amid concerns Covid-related restrictions in China may curb demand. Front-month crude oil futures are up around $2.75, U.S. stock index futures indicate a firmer open and the U.S. dollar index is down more than 700 points.
USDA reported a soybean sale of 104,000 MT for delivery to Taiwan during the 2022-23 marketing year.
Some rain will fall on the Central Plains today and Saturday followed by a week to 10 days of drying, World Weather Inc. said. “The moisture will be welcome in easing recent hot, dry, conditions, but much more rain will be needed,” the forecaster said. The western U.S. Corn Belt will receive a few showers this weekend, bringing some moisture to filling soybeans.
India, the world’s biggest exporter of rice, restricted its international sales to safeguard domestic supply. Starting today, a 20% duty will be applied to exports of most grades of rice, though not basmati. Shipments of “broken rice,” eaten in some parts of Africa but otherwise feedstock, were banned outright. Exporters will ask the government to waive taxes on about 2 MMT of rice that have been contracted but not yet shipped
Argentine soy farmers who hold more than 5% of their production will face financing costs above the normal benchmark rate, the country’s central bank said, part of a wider push to encourage sales. The central bank said soy farmers over a certain size who hoarded their stock would face a minimum financing rate “equivalent to 120% of the latest Monetary Policy rate.” Argentina’s benchmark interest rate stands at 69.5%. The minimum rate would start at 83.4% under the new policy, which aims “to make credit more expensive so that it is more convenient to sell (soybeans) than to take credit,” a source familiar with the matter told Reuters. On Sunday, Argentina boosted the soy foreign exchange rate for farmers to encourage more sales.
President Vladimir Putin and his Turkish counterpart Tayyip Erdogan will discuss implementation of a deal on Ukrainian grain exports when they meet in Uzbekistan next week. Putin earlier this week criticized the deal and said it may need to be reworked. Russia’s Foreign Ministry said today the deal is being fulfilled “badly” and its extension will depend on how it is implemented, Russia state-owned RIA news agency reported.
Frosts in the last two weeks in Argentina have caused some damage to the country’s 2022-23 wheat crop, the Buenos Aires Grain Exchange said. The frost damage adds to the impact caused by drought seen in recent months, which led the key grains exchange to cut its wheat planting forecast from an initial level of 6.6 million hectares to 6.1 million hectares.
French corn crop conditions declined for a ninth consecutive week, data from farm office FranceAgriMer showed, in a further sign of damage from a hot, dry summer in the European Union’s biggest producer. An estimated 43% of French grain maize crops were in good or excellent condition by Sept. 5, down from 45% the previous week.
China’s state planner said the country’s supply of hogs was sufficient and would increase toward the end of the year, guaranteeing pork prices would stay in a “reasonable” range. The National Development and Reform Commission also said it would take measures to ensure that hog prices remained reasonable, after they surged in recent months.
Taiwan passed on an international tender to purchase 65,000 MT of corn.
CORN: December corn reached $6.75 overnight and is poised for a third straight weekly gain after ending last week at $6.65 3/4. USDA’s Crop Production update on Monday is expected to reflect a smaller crop estimate following extreme heat and dryness in parts of the Midwest this summer. USDA is expected to lower its estimate for the U.S. corn crop to 14.088 billion bu., down 271 million bu. from its August forecast, based on a Reuters survey of analysts. The average estimated U.S. yield is expected to be cut to 172.5 bu. per acre from 175.4 bu. per acre.
SOYBEANS: November soybeans overnight rose as high as $14.03 but are still headed for a second straight weekly decline after ending last week at $14.20 1/2. USDA is expected to lower its estimate for the U.S. soybean crop to 4.496 billion bu. from 4.531 billion bu. in August, based on the Reuters survey. But the expected crop would still be up from last year’s record 4.435 billion bu. production. The average U.S. yield is expected to be reduced to an estimated 51.5 bu. per acre from 51.9 bu. last month.
WHEAT: December SRW wheat overnight rose as high as $8.41 1/4 and is headed for a strong weekly gain after ending last week at $8.11. USDA’s Supply and Demand Report is expected to show a slight increase in the global supply outlook next year. Global wheat ending stocks for 2022-23 will be increased to an estimated 268.10 MMT from USDA’s current estimate of 267.34 MMT.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-firmer
CATTLE: Live cattle futures may face pressure from weakness in the cash market. Live steers averaged $141.42 this week through Thursday morning, down $3.37 from last week’s average. The softer tone disappointed traders who early in the week anticipated steady to firmer prices given feedlots are current on marketings. October futures are still modestly higher for the week, likely a reflection of expectations cash prices will soon begin to firm and generally strengthen through next year as supplies tighten. Continued erosion in wholesale beef may limit buying interest in futures. Choice beef cutout values fell $3.33 Thursday to $258.01, near a four-month low.
HOGS: Lean hog futures may gain followthrough support from this week’s sharp rebound off two-month lows, but an ongoing cash slump likely will limit the upside. The CME lean hog index is down another $1.22 to $100.26 (as of Sept. 7) and could drop below $100.00 for the first time since Mid-May. October futures are $8.135 below today’s cash index quote, about half the discount the market held at the end of August. But the current discount still reflects a pessimistic stance as the cash index has firmed on average over the past five years into mid-October.