GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 6 to 8 cents higher.
Wheat: SRW 1 to 3 cents lower; HRW 6 to 8 cents lower; spring wheat 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Corn and soybeans saw an impressive bounce overnight on corrective strength. Positioning is likely to drive some trade ahead of tomorrow’s quarterly Grain Stocks report from USDA. Wheat favored the downside overnight but remains above key technical support. Front-month crude oil futures are trading modestly lower and near $90 support while the U.S. dollar index is up around 150 points.
There remains a lot of unknowns on whether China will enter the market for U.S. commodities outside of soybeans. Beijing has yet to affirm $17 billion in additional purchases, but after cutting tariffs on a slew of farm goods outside of soybeans over the weekend, some traders and analysts are hopeful there will be a demand pickup for other goods. The market wants to see purchases and shipments before pricing in additional Chinese demand, which holds true for soybeans as well. China has been slow to add to purchases despite ships carrying soybeans already on the way to China.
The White House is considering taking regulatory steps that would allow wider sales of red-dyed diesel in an effort to bring down prices, Reuters reported, citing people familiar with the discussions. The report described the proposal as a leading alternative to a diesel export ban, which President Donald Trump has spoken favorably about but has faced significant pushback from the oil industry and others. The proposal would expand the circumstances under which red-dyed diesel, which is generally reserved for off-road uses such as farming and is exempt from most federal fuel taxes, could be sold for broader use, the report said. Under current federal rules, the tax on highway diesel is 24.4 cents per gallon, while dyed diesel is exempt from that tax but remains subject to a 0.1-cent-per-gallon charge that funds the federal Leaking Underground Storage Tank Trust Fund, the Reuters report said. Bloomberg reported Texas is allowing wider use of dyed diesel. Governor Greg Abbott issued a disaster proclamation on Monday with a range of measures, including a provision that farmers and truckers can now use dyed diesel on Texas roads, according to a statement on his office’s website. Fuel, crop, and timber loads can also move at a higher weight.
Brent crude oil prices rose for a second day as a lack of progress in U.S.-Iran talks and signs of strong demand outweighed a resumption of flows through a key pipeline from top exporter Saudi Arabia. Iranian officials have privately expressed pessimism about reaching a deal to end hostilities with Washington and reopen the Strait of Hormuz before U.S. midterm elections in November. Brent crude traded above $107 a barrel overnight after ticking higher in the previous session, while Nymex West Texas Intermediate was around $92 as of this writing. Saudi Arabia has restored about half the flows through its cross-country East-West pipeline, a crucial route bypassing the strait, after drone strikes halted operations earlier this month. Flows through the link to the Red Sea have reached at least 3.5 million barrels a day, reports said.
CORN: December corn futures are chipping away at Monday’s losses. Bulls are looking to overcome resistance at $5.27 1/2 then $5.29 1/4 on continued strength. Bulls are looking to hold support at $5.16 on a reversal lower.
SOYBEANS: November soybeans bounced near 40-day moving average support. That marks key support on a turn lower today at $12.75 3/4. Resistance lies at $13.00 on continued strength.
WHEAT: December SRW futures are consolidating near 100-day moving average support at $6.83 1/2. Bulls are looking to hold prices above that mark. Resistance comes in at $7.00 then $7.07 3/4 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone on corrective buying. Prices hit the lower end of the recent range on Monday’s selling pressure, which could spur corrective strength today. Cash cattle continues to slide, as last week’s average fell another $1.20 to $220.67. Choice beef climbed $1.65 to $380.48 Monday, rebounding from recent losses.
HOGS: Lean hogs are expected to open with a mostly weaker tone in a continuation of recent selling pressure. Prices continue to trend lower on the daily bar chart as funds hold heavily short positions and the cash market declines seasonally. The CME lean hog index is down another 55 cents to $81.21 as of Sept. 25. Pork cutout rose $1.06 to $87.80 Monday, led by gains in picnics and butts.