Market Snapshot | November 1, 2023

Corn is mostly 3 to 4 cents lower at midmorning.

• Corn futures are lower despite notable strength in crude oil and gains in wheat and soybean futures.
• USDA is expected to report corn-for-ethanol use at 411.8 million bu., which would be down 7.0% from August, but 7.4% above last year.
• Major U.S. airlines and aviation companies joined ethanol companies to send a letter to the Biden administration on Wednesday, backing a regulatory change that would make it easier for sustainable aviation fuel (SAF) made from corn-based ethanol to qualify for federal subsidies.
• Ethanol production rose 12,00 barrels per day (bpd) to 1.052 million barrels bpd during week ended Oct. 27, which was 1.2% above the same week last year. Ethanol stocks declined 386,000 barrels to 21.012 million barrels, the lowest since the week ended Dec. 24, 2021.
• December corn has dropped to the lowest level since Sept. 19, falling below support at $4.76 1/2 and $4.74 1/4. Additional support lies at $4.71, while resistance stands at $4.79 3/4

Soybeans are around a nickel to 7 cents higher, while December meal futures are around $2.50 lower. December soyoil is about 20 points higher.

• Soybeans are posting followthrough gains, though strong overhead resistance is limiting buying efforts.
• Traders expect USDA to report soybean crush totaled 173.2 million bu. during September, according to a Bloomberg survey, which would be up 2.5% from August and 3.4% above last year. NOPA data implied soybean crush would be 175 million bushels.
• World Weather Inc. reports improving rainfall in center-west and northeastern Brazil in this coming weekend and next week will set the stage for better summer crop planting conditions, though southern Brazil must dry out after recent flooding. The forecaster states damage is likely to some crops in the interior south and center west Brazil from too much and too little rain.
• Malaysian palm oil futures made gains into the close overnight amid stronger crude oil prices and strength on China’s Dalian exchange, though concerns over rising stockpiles limited gains.
• January soybeans are pivoting mostly around the 10-day moving average of $13.13 1/2, while the 20-day moving average of $13.06 1/4 is limiting downside efforts.

Winter wheat contracts are mostly 3 to 6 cents higher, while HRS contracts are a penny higher.

• SRW wheat futures are posting mild corrective gains after three straight sessions of lower closes.
• Russian agricultural consultancy SovEcon lowered its forecast for Russia’s 2023-24 wheat exports to 48.8 MMT, down from 49.2 MMT previously.
• Recent moisture increases in the U.S. Plains, Midwest and Pacific Northwest will be favorable for winter wheat establishment, but cold weather and some snow will restrict emergence and establishment of the more recently planted crops for a little while, though World Weather reports warming is expected this weekend and next week.
• Ukraine stated earlier today that Russian warplanes had dropped “explosive objects” into the likely paths of civilian vessels in the Black Sea three times in the past 24 hours, though the shipping corridor was reportedly still operating.
• December SRW futures are trading within Tuesday’s range, with resistance at $5.65 limiting gains, while Tuesday’s low of $5.54 1/2 is providing initial support.

Live cattle are slightly higher, while feeders are posting moderate to strong gains at midmorning.

• Nearby live cattle are trading cautiously higher as overhead resistance and fading wholesale fundamentals limit gains.
• Last week’s average cash cattle price dropped $2.13, but late-week trade was notably higher than initial price action. Most cash sources are expected steady/firmer prices this week, despite packers having fresh contract supplies available with the flip of the calendar.
• Wholesale prices tumbled Tuesday, with Choice dropping $4.10 to $305.18, while Select fell $1.39 to $279.50, narrowing the Choice/Select spread to $25.68. Movement improved, however, to 140 loads.
• December live cattle are trading within Tuesday’s range and continue to be limited by the 20-day moving average of $184.14. Initial support is at $182.53. 

Lean hogs are modestly higher in most contracts at midsession.

• Lean hog futures are extending higher for the sixth straight session despite continued weakness in cash fundamentals.
• The CME lean hog index is down another 38 cents to $77.13 as of Oct. 30.
• The pork cutout value fell $1.38 to $86.48 on Tuesday, led by a near $8.00 drop in primal bellies. Movement totaled 317.4 loads for the day.
• December lean hogs have edged above the 40-day moving average of $71.68 and are now facing resistance at $72.15. Meanwhile, initial support remains at $70.95.