Hog producers: Add 4th, 1st-qtr. hedge coverage... Lean hog futures have posted a strong contra-seasonal rally from their summer lows. While the market could have more near-term upside potential if the cash index continues to strengthen, the rally presents an opportunity to lock in a price floor in case of a sharp seasonal decline. We advise hog producers to hedge 50% of fourth-quarter production in December $84.00 put options and 50% of first-quarter production in February $84.00 puts. Our fills were $2.075 for the December puts and $3.35 for the February puts.
Corn futures are unchanged to a penny higher at midmorning.
· Corn futures are modestly firmer, in tandem with soybean futures.
· USDA reported corn export sales of 2.34 MMT during the week ended Oct. 24, down 35% from the previous week but up 7% from the four-week average. Net sales were within the pre-report range of expectations from 1.8 MMT to 3.5 MMT. Exports totaled 788,000 MT during the week.
· Central U.S. weather is becoming more active with waves of rain likely to bring an end to drought from parts of Texas to Missouri and southeastern Iowa as well as portions of Illinois in the next ten days.
· December corn is facing resistance at the near convergence of the 10-, 40-, 20- and 100-day moving averages, while initial support lies at $4.10 1/4.
Soybeans are mostly 6 to 7 cents higher, while soymeal futures are around $1.00 lower. Soyoil is around 120 to 140 points higher.
· Soybeans are extending higher with support stemming from strength in soyoil futures.
· USDA reported soybean export sales of 2.27 MMT during the week ended Oct. 24, up 6% from the previous week and 29% from the four-week average. Net sales were near the middle of the pre-report range of expectations from 1.6 MMT to 2.8 MMT. Exports during the week totaled 2.45 MMT.
· USDA reported daily soymeal sales of 150,000 MT to unknown destinations during 2024-25.
· January soybean futures are facing resistance at $10.00, which is backed by the 20-day moving average around $10.08 1/2, while support lies at $9.87.
Wheat futures are mostly 4 to 6 cents lower.
· Wheat futures are being pressured by rains moving through U.S. winter wheat production areas and looming technical resistance.
· U.S. winter wheat production areas will benefit from rains, which will persist through the weekend. However, followup rainfall will be needed across the driest areas as drought spread ahead of the precip.
· USDA reported wheat export sales of 411,400 MT during the week ended Oct. 24, down 24% from the previous week and 14% from the four-week average. Sales were within the pre-report range of expectations from 300,000 to 600,000 MT. Exports for the week were at a marketing-year low of 244,400 MT.
· December SRW futures continue to face resistance at the 10-day moving average of $5.72 1/4, while support is holding at $5.64 1/2.
Live cattle and feeders are mixed at midsession.
· Live cattle futures are pausing following two days of sharp corrective selling.
· Cash cattle traded at mostly steady prices in the Southern Plains, though many feedlots still sought firmer bids, despite heavy pressure on cattle futures. The northern market, where supplies are more plentiful, saw trade begin at steady to lower prices.
· Wholesale beef prices slid on Wednesday, with Choice rising $1.17 to $319.44, while Select fell 64 cents to $389.32. Movement totaled 154 loads for the day.
· USDA reported net beef sales of 13,900 MT, down 17% from the previous week and from the four-week average.
· December live cattle are trading within Wednesday’s lower range, with support at the previous session low of $185.475. Resistance stands at the 20- and 10-day moving averages of $187.54 and $187.84.
Hog futures are weaker at midmorning.
· December hog futures are favoring the downside after notching fresh contract highs for a fourth straight day in early trade.
· The CME lean hog index is up another $1.05 to $86.78 as of Oct. 29, extending the string of gains to nine straight days, during which the index has jumped $2.92.
· The pork cutout value rose 54 cents despite losses in all cuts aside from primal bellies and hams. Movement totaled 248.0 loads.
· USDA reported net pork sales of 44,800 MT for 2024, up notably from the previous week and 16% from the four-week average.
· December lean hogs face resistance at this morning’s contract high at $84.675 and then $85.02, while support lies at $84.01.