Ahead of the Open | September 7, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: Steady to 2 cents lower.
Wheat: SRW steady; HRW 2 to 4 cents lower; HRS steady to 3 cents higher.
GENERAL COMMENTS: Trading occurred both sides of unchanged overnight, but profit-taking was seen into the break as corn, beans and wheat are each lower. Front-month crude oil futures are seeing profit-taking as well as prices are on nine-month highs. The U.S. dollar index is stronger and near a six-month high, further limiting buyer interest.
Commodity brokerage firm StoneX estimates the U.S. corn crop at 15.102 billion bu. on an average yield of 175 bu. per acre, down from the firm’s August forecasts of 15.274 billion bu. and a yield of 177 bu. per acre. In August, USDA estimated the corn crop at 15.111 billion bu. on a yield of 175.1 bu. per acre. StoneX estimates the U.S. soybean crop at 4.144 billion bu. on a yield of 50.1 bu. per acre, down from its August forecasts of 4.173 billion bu. and 50.5 bu. per acre. In August, USDA estimated the soybean crop at 4.205 billion bu. on a yield of 50.9 bu. per acre. StoneX says the estimates are for USDA’s final production number and assume USDA’s harvested acreage.
Russian drone strikes damaged port infrastructure, including a grain silo and administrative buildings in the Izmail district of Ukraine’s Odesa region. Russia has stepped up attacks on Ukraine’s grain export infrastructure, especially at Danube River ports. Meanwhile, Ukraine has started shipping grain via Croatian seaports, aiming to broaden its export routes.
The U.S. exported $12.17 billion of ag goods in July, marking a 5% decrease from the previous month and the lowest monthly figure since September 2021. Ag imports amounted to $15.75 billion, which was a 1.4% drop from June. This resulted in a monthly trade deficit of $3.58 billion, setting a record for the highest deficit in a single month.
CORN: December corn futures saw muted volatility overnight after yesterday’s reversal from the highs. Prices were largely supported by 10-day moving average support, an important level today at $4.85 1/2. Resistance stands at $4.89 1/4, a level that capped nearly all the upside on Wednesday. Prices continue to tighten with lower highs and higher lows, a pattern that may continue until next week’s Crop Production report.
SOYBEANS: November soybean futures saw profit-taking overnight, though prices were largely supported by initial support at the 10-day moving average at $13.71. Further selling will encounter support at $13.63 1/2. Bulls are targeting resistance at $13.81, backed by Wednesday’s high of $13.84 3/4.
WHEAT: December SRW futures saw profit-taking overnight, unable to surpass the 10-day moving average (currently at $6.10 1/4), a level that has capped nearly all upside since late July. Bulls continue to fight an uphill battle, despite the bullish seasonality in September. Support can be expected at $5.95 1/2 and is backed by the contract low at $5.92 1/4.
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to continue Wednesday’s upside breakout on the daily bar chart. While cash trade has been largely limited in the shortened week, the average price so far is $183.78, $1.28 higher than last week. ’s average. While Although cash and futures showed strength, wholesale prices continue to encounter resistance above $315.00 in Choice and $290.00 in Select, with cutout falling $1.91 to $313.57 and $1.93 to $287.61, respectively.
HOGS: Lean hog futures are expected to open mostly higher as recent volatility is likely to continue. Prices have tended to fade big moves the following day and prices closed right on a steep uptrend yesterday, giving the opening advantage to bulls. Pork cutout fell yesterday despite midsession strength, falling 54 cents to $98.33, led lower by picnics though most values saw losses. The CME lean hog index is down another 55 cents to $86.01, extending the seasonal price drop, though that’s the smallest daily decline in three weeks.
