Ahead of the Open | September 22, 2023
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 4 to 8 cents higher.
Wheat: 2 to 4 cents higher.
GENERAL COMMENTS: Soybean and wheat futures posted mild gains amid corrective buying in light overnight trade, while corn pivoted narrowly around unchanged. Fresh news is limited and outside markets are mixed with both crude oil and the U.S. dollar index higher. All signs point toward a continuation of the quiet overnight session during daytime trade.
Lawmakers exited Washington early and won’t return until Sept. 26 after House Republicans for a second time rejected Speaker Kevin McCarthy’s (R-Calif) efforts to pass a Pentagon funding bill. It now looks like the Senate will take the lead in trying to get a continuing resolution to keep the government funded after Sept. 30, even though the House would likely balk at its contents.
Aroyat left Ukraine’s Chornomorsk port on the Black Sea loaded with 17,600 MT of wheat for Egypt. It was the second bulk carrier to leave the port this week using Ukraine’s new temporary humanitarian corridor.
India sold 1.809 MTMT of state-owned wheat into the domestic market the ease prices. The Indian government says there are sufficient wheat reserves for continuation of these sales during 2023-24, without providing detail on how much wheat it intends to auction.
Mexico plans to test new strands of hybrid seed varieties created by researchers at the Autonomous University of Chapingo in 2024 with a scheduled release for commercial planting in 2025. The project aims in two years to develop enough non-GM seed varieties cultivable in Mexico to replace about 6 MMT of the roughly 18 MMT of corn the country imports from the U.S. annually.
CORN: December corn futures continue to hold in the recent consolidation range with the contract seemingly stuck in neutral. There are other levels of support and resistance, but the key marks are this week’s low at $4.67 3/4 and the psychological $5.00 level.
SOYBEANS: November soybean futures rebounded overnight but remain short-term oversold. While that begs for an extension of the overnight corrective gains, it wouldn’t be surprising to see fresh sellers return as the path of least resistance is down. Key near-term support is the August low at $12.82 1/4. Near-term resistance is layered from $13.03 to $13.23.
WHEAT: December SRW futures reached short-term oversold on Thursday, but the overnight rebound corrected that condition. Aside from short bouts of corrective buying, the upside is limited. Near-term support is last week’s contract low at $5.70. Near-term resistance is heavily layered to $6.08 1/4.
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures are expected to open lower on followthrough selling after Thursday’s sharp losses. But it wouldn’t surprise us to see buyers show up under the market, especially if early seller interest is limited. Traders are still waiting on active cash cattle trade and preparing for this afternoon’s Cattle on Feed Report. Cash cattle trade has been limited thus far, but what has traded was at steady/firmer prices in the northern market. After a big jump in movement amid price pressure on Wednesday, wholesale beef prices firmed a little yesterday, with Choice up 67 cents and Select 32 cents higher. Traders expect the Cattle on Feed Report to show the feedlot inventory as of Sept. 1 down 2.3% from year-ago at 11.023 million head, which would be the 12th consecutive month of year-over-year declines. Placements are expected to have declined 6.4%, while marketings are seen down 5.3% from year-ago levels.
HOGS: Lean hog futures are expected to open lower on followthrough selling after Thursday’s selloff. But we wouldn’t be shocked if buyer interest shows up under the market. The CME lean hog index is up 50 cents to $87.17 (as of Sept. 20). October hogs finished Thursday $4.22 below that level. The pork cutout value dropped 47 cents yesterday and movement declined, signaling packers again struggled to find enough retailer demand on the push above $100.00 earlier in the week.
