Ahead of the Open | November 16, 2023
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 10 to 13 cents lower.
Wheat: SRW 5 to 7 cents lower; HRW 3 to 5 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each saw continued selling pressure in the overnight session, with soybeans and soymeal leading the way lower. Outside markets were relatively quiet overnight, as front-month crude oil futures faced mild selling pressure despite the U.S. dollar index trading around 250 points lower. Both the equity market and bonds have quieted from volatility earlier this week.
President Joe Biden and Chinese President Xi Jinping met during the Asia-Pacific Economic Cooperation Summit to address various geopolitical, trade and economic issues. Both leaders recognized the need for cooperation to stabilize relations. Biden aimed to ease tensions with China without appearing weak on the issue. Xi sought foreign investment and export markets to counter China’s economic challenges, including a real-estate crash and excessive debt. Xi focused on improving business ties, meeting with U.S. business executives. Both leaders discussed avoiding severe measures that would weaken China’s economy, despite trade restrictions. Traders labeled the meeting as “disappointing,” noting no unexpected breakthroughs.
The Senate approved the continuing resolution with strong bipartisan support in an 87-11 vote, resolving some last-minute disputes. The House had previously passed the legislation on a 336-95 vote. The measure includes an extension of the 2018 Farm Bill through September 2024, and funds 21 “orphan” programs via offsetting funding from USDA’s Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program. Biden is expected to sign the measure into law. The next funding deadlines are Jan. 19 for some agencies including Agriculture and Feb. 2 for others, creating pressure for negotiations on fiscal year (FY) 2024 appropriations. However, the House and Senate have not yet agreed on a topline budget target, as House Republicans have rejected the spring debt limit suspension law.
Export sales for the week ended Nov. 9:
Corn: Net sales of 1.808 MMT for 2023-24, up 78% from the previous week and 81% from the four-week average. Over half the total came from Mexico (1.061 MMT), with Japan purchasing the second most. Traders expected sales between 900,000 MT to 1.55 MMT.
Soybeans: Net sales of 3.918 MMT for 2023-24, a marketing year high and over triple week-ago and four-week average. Increases came primarily from China (2.615 MMT), followed by unknown destinations (721,300 MT). Traders expected sales between 2.9 MMT and 4.5 MMT.
Wheat: Net sales of 176,300 MT for 2023-24, the lowest since early July. Sales were half of the previous week and 57% below the four-week average. Sales were below expectations of 250,000 to 500,000 MT.
This morning, USDA reported daily sales of 220,000 MT of soybeans for delivery to unknown destinations during the current marketing year.
CORN: December corn futures continue to trade largely sideways in choppy trading. Bulls are seeking to hold support at $4.68, a break below which targets last week’s for-the-move low at $4.61. Bulls are seeking to reclaim prior support, now resistance at $4.74, which capped gains in the overnight session. Further resistance lies at $4.77 1/2.
SOYBEANS: January soybean futures saw continued profit-taking after trading at the highest level in over two months on Wednesday. Bulls are seeking to hold 10-day moving average support at $13.63 1/2, with backing from $13.48 1/2. Bears are looking to hold resistance at $13.87, backed by yesterday’s high of $13.98 1/2, coinciding with the psychological $14.00 mark.
WHEAT: December SRW futures saw continued selling pressure overnight, dipping below the upward sloping trendline from the September contract low. Bulls are seeking to close prices above $5.63 in order to post a bullish false breakdown on the daily bar chart. Further resistance lies at $5.69 1/4. Bears are targeting the Oct. 12 low of $5.47 1/4, with backing from the contract low at $5.40.
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone, continuing this week’s corrective bounce. Recent price action has closely mimicked the late-October selloff, which saw steady buying until prices slipped again in early November. Minimal cash cattle trade has taken place thus far this week, though some action occurred at $178.00, down $2.47 from last week at this time. Packers and feedlots are far off on bids and asking prices, which will likely delay significant trade until after Friday’s Cattle on Feed Report. Wholesale beef prices stabilized on Wednesday, as Choice gained 66 cents to $296.33 and Select fell 3 cents to $267.85. USDA reported beef export sales of 8,900 MT for 2023, down 35% from the previous week and 27% from the four-week average.
HOGS: Lean hog futures are expected to open with a weaker tone amid weaker cash fundamentals. Despite recent upticks in the CME lean hog index, it continues to face seasonal pressure and the lack of strength could discourage traders in their belief that a seasonal low might come earlier than usual this year. The index dropped 7 cents to $76.06 today (as of Nov. 14), just a penny above the for-the-move low made earlier this week. Wholesale pork prices fell 78 cents to $86.82 with most losses stemming from a $8.00 drop in primal bellies. USDA reported pork export sales of 24,300 MT for 2023, down 51% from the previous week and 30% from the four-week average.
