Ahead of the Open | August 30, 2023
GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 3 to 6 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW 1 to 3 cents higher; HRS 1 to 3 cents lower.
GENERAL COMMENTS: Corn, soybeans and the winter wheat markets posted corrective gains during the overnight session. Spring wheat futures faced followthrough selling despite the smaller-than-expected Canadian crop estimate on Tuesday. Outside markets are price-supportive for grains, with the U.S. dollar index down more than 350 points this morning and crude oil modestly firmer.
USDA reported daily soybean sales of 266,000 MT to unknown destinations for 2023-24.
Forecasts remain mostly hot and dry for the Corn Belt, Plains and Delta for the next 10 days. That will further stress corn and soybeans that are prematurely shutting down in the driest areas.
Hurricane Idalia made landfall this morning along the northern Florida Gulf Coast and will race to the northeast reaching into southeastern Georgia by early afternoon. The storm will stay a hurricane all the way to Savannah, Georgia this evening and possibly to near Charleston, South Carolina early tonight but is then expected to be downgraded to tropical storm status just prior to moving off the Atlantic coast of South Carolina overnight tonight and early Thursday. Overall impacts to crops are expected to be minimal.
Russian Foreign Minister Sergei Lavrov will hold talks on Thursday and Friday with his Turkish counterpart regarding the Black Sea grain deal, which Moscow pulled out of in mid-July.
U.S. gross domestic product rose 2.1% in the second quarter, according to the second estimate, down from 2.4% growth estimated initially. Economists expected no change.
CORN: December corn futures posted an inside day up overnight after Tuesday’s outside day down. Near-term support extends from $4.85 1/2 to this month’s low at $4.73 1/2. Resistance is heavily layered in the $4.90 to $5.07 1/2 range.
SOYBEANS: November soybean futures filled Monday’s chart gap at $13.90 1/2 overnight before bouncing. Near-term support extends from the overnight low at $13.85 3/4 to the 10-day moving average at $13.70 1/2. Near-term resistance is at the psychological $14.00 mark and then Monday’s high at $14.09 1/2.
WHEAT: December SRW futures bounced from Tuesday’s low at $5.99 1/2 overnight, forming at least a temporary double-bottom. Near-term resistance is heavily layered from $6.08 1/4 to $6.46 1/4.
CATTLE: Mixed.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mixed tone this morning as traders wait for cash cattle trade to develop. With active cash trade not likely until late Thursday or Friday, futures should be rather directionless unless there’s a wave of commercial selling in an attempt by packers to get feedlots to sell at lower prices again this week. Wholesale beef prices followed up Monday’s drop with steeper declines yesterday. Choice beef fell $2.68 and Select was $2.41 lower. Despite this week’s downturn in wholesale prices, packer margins remain in the black.
HOGS: Lean hog futures are expected to open with a mostly weaker tone after Tuesday’s low-range close. The seasonal drop in the cash hog market is accelerating, with the CME lean hog index down $1.48 to $92.41 (as of Aug. 28). That’s the biggest daily decline on the pullback from the seasonal top in late July. October hog futures finished Tuesday $11.685 below today’s cash quote. The pork cutout value dropped $3.20 on Tuesday, pressured almost exclusively by a $26.50 plunge in primal belly prices. Since last Thursday, cash belly prices have made major daily price swings, causing big fluctuations in the cutout value. While bellies are volatile, the other cuts have been relatively quiet.
