Ahead of the Open | October 24, 2023
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 1 to 3 cents higher.
Wheat: 5 to 10 cents lower.
GENERAL COMMENTS: Soybeans mildly favored the upside overnight following two-sided trade. Corn and wheat futures traded lower on pressure from strong gains in the U.S. dollar index, which is around 500 points higher this morning. Crude oil futures are modestly higher.
USDA reported daily corn sales of 117,200 MT to Mexico for 2023-24.
Crop consultant Dr. Michael Cordonnier left his Brazilian soybean and corn crop estimates at 162 MMT and 125 MMT, respectively, but he now has a neutral to lower bias toward both crops. Irregular rainfall across Brazil caused Cordonnier to be more cautious with his bias toward soybeans, while delayed soybean plantings could push back harvest and the planting of safrinha corn. Cordonnier left his Argentine crop estimates at 50 MMT for soybeans and 52 MMT for corn.
World Weather Inc. says Argentina’s greatest rainfall is over for a while, although some periodic light showers and thunderstorm activity will be possible. Center-west Brazil will see some showers in the coming week, but much of the resulting rain will not counter evaporation, leaving the need for additional rains. Interior southern Brazil and southern Paraguay will receive too much rain this weekend into next week, resulting in a new round of flooding and more delays to summer crop planting.
Russia’s 2023 grain harvest is expected to be the second highest ever at around 140 MMT, behind last year’s record crop. Deputy Prime Minister Viktoria Abramchenko said 137 MMT of grain has been harvested to date, including around 90 MMT of wheat. He expects the country to export about 60 MMT of grain in 2023-24.
CORN: December corn futures dropped below the 20-day moving average overnight after closing below the 5- and 10-day averages on Monday. Next support is the 50- and 40-day averages at $4.85 1/2 and $4.85 1/4, respectively. Below that, support would be in the $4.82 to $4.75 range. Resistance is layered from $4.90 to $5.09 1/2.
SOYBEANS: November soybean futures found buyers on the spike of the 20-day moving average overnight. Near-term support extends from that level near $12.85 to the overnight low at $12.80 1/2. Near-term resistance is the psychological $13.00 mark, followed by the 5-day average near $13.01 1/2.
WHEAT: December SRW futures bounced from the 10-day moving average at $5.78 1/2 overnight. Below that, support is at the 20-day average at $5.72 3/4. Resistance is layered from the 5-day moving average at $5.86 to last week’s high at $6.04 1/2.
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open lower after a sharply lower to limit-down close on Monday that featured aggressive long liquidation. Volatility could be extreme today as daily price limits expand to $10.00 for live cattle and $12.25 for feeders. Today’s price action could be critical after Monday’s hefty selloff did major technical damage. Additional heavy selling today would completely flip the script and give bears the strong upper hand. But if buyers show up under the market it would suggest yesterday’s price action was an overdone bearish reaction.
HOGS: Lean hog futures are expected to open with a mostly weaker tone amid pressure from the seasonally declining cash hog market. The CME lean hog index is down another 72 cents to $79.07 (as of Oct. 20), extending the seasonal downturn. The pork cutout value firmed 58 cents on Monday, marking the second straight daily gain after an extended pullback.
