Ahead of the Open | October 4, 2023

Ahead of the Open
Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 1 cent lower to 1 cent higher.

Soybeans: Steady to 2 cents higher.

Wheat: Winter wheat 8 to 10 cents lower; HRS 5 to 7 cents lower.

GENERAL COMMENTS: Corn chopped around unchanged overnight while soybeans favored the upside, though went into the break well off session highs. Wheat favored the downside as rumors are circulating that Russia may reenter the Black Sea grain deal. The attitude in outside markets has shifted from early this week, as bonds are rallying, which lessens interest rates interest rates, front-month crude oil futures are sharply over $1.50 lower, marking an $7.50 decline from the Sept. 28 peak and the U.S. dollar index is trading over 400 points lower.

The House voted to remove Kevin McCarthy (R-Calif.) from the position of House Speaker, marking the only time in history a speaker has been removed by their colleagues and the first vote on ousting a speaker since 1910. Eight Republicans joined all Democrats in supporting McCarthy’s removal. The absence of a House Speaker will lead to a stall in legislative business until a replacement is elected. Bottom line: This raises fresh attention to the dysfunction in Washington and made clear the GOP’s rebel right wing will not tolerate leaders who compromise with President Joe Biden and his party. Congress faces another deadline by Nov. 17 to avert a government shutdown. While farm bill deliberations and staff work can continue, the timeline of any floor action becomes murkier – and it wasn’t that clear before the latest GOP chaos.

President Joe Biden held a telephone call with nearly a dozen foreign leaders to reaffirm the United States’ commitment to supporting Ukraine amidst concerns over the omission of $6 billion in aid from a government funding bill. The White House stated that Biden assured these allies the U.S. would stand by Ukraine in defending its sovereignty and territorial integrity. The call included leaders such as UK Prime Minister Rishi Sunak, Polish President Andrzej Duda, German Chancellor Olaf Scholz, Italian Prime Minister Giorgia Meloni and Canadian Prime Minister Justin Trudeau, among others. NATO Secretary General Jens Stoltenberg, European Commission President Ursula von der Leyen and Japanese Prime Minister Fumio Kishida were also part of the conversation.

Ukraine’s navy said 12 more cargo vessels were ready to enter its Black Sea humanitarian shipping corridor on their way to Ukrainian ports to be loaded. It was uncertain when the vessels would be loaded with grain and scheduled to set sail to their destinations.

This morning, the USDA reported sales of 196,607 metric tons of corn for delivery to Mexico. Of the total, 109,226 metric tons is for delivery during the 2023/2024 marketing year and 87,381 metric tons is for delivery during the 2024/2025 marketing year.

 

 

CORN: December corn futures continue to struggle against 40-day moving average resistance, currently at $4.88 1/2. Today marks the fifth session in a row of testing the level, which benefits the bulls as the resistance wears down. Additional resistance lies at $4.96 1/4. Bulls are seeking to hold initial resistance of $4.83 1/2, which is backed by $4.76 3/4.


SOYBEANS: November soybean futures traded up to the Sept. 25 low overnight, a level that will remain resistance at $12.84 1/2. Additional resistance lies at $12.95. Prices continue to repeat the similar pattern of large drops followed by tepid corrective buying for a couple days that has persisted since late August and was more pronounced in mid to late September. Support lies at $12.72 1/2 and is backed by $12.56 3/4.


WHEAT: December SRW futures were unable to overcome initial resistance at $5.74 on Tuesday, which will remain initial resistance today. Further buying is likely to encounter resistance at $5.82 1/2. Bulls are seeking to hold support at $5.50, backed by the contract low at $5.40.

 


LIVESTOCK CALLS

CATTLE: Lower.

HOGS: Lower.


CATTLE: Live cattle futures are expected to open mostly lower in a continuation of Tuesday’s technical breakdown. The inability for wholesale beef prices to push higher will continue to limit packers’ willingness to pay up for cash cattle. Little cash trade has taken place thus far this week as packers utilize contracted supplies, but wholesale prices continue to slip. Choice cutout fell $3.01 to $300.07 while Select dropped $1.39 to $275.59. Both grades are nearing the August lows and recent support zone. A slip below those levels would further deteriorate bulls’ confidence.

HOGS: Lean hog futures are expected to open mostly lower as cash fundamentals continue to weaken. Despite posting a gain at midsession Tuesday, wholesale pork prices slipped $1.43 on the day to $94.61 as hams gave up midsession gains and bellies fell sharply. The CME lean hog index fell 29 cents today to $84.55 (as of Oct. 2), a mild drop compared to the two prior days, which supported October futures as the contract will be cash settled against the index on Oct. 17. The current discount October futures hold to the index should limit selling pressure over the next two weeks.

 

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