GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 1 to 3 cents lower.
Wheat: 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Corn led strength overnight while soybeans continue to consolidate following the recent leg higher. Wheat was caught in the middle and saw action on either side of unchanged. Outside markets are unsupportive this morning as front-month crude oil futures are trading just below unchanged while the U.S. dollar index is over 250 points higher.
Federal Reserve Governor Christopher Waller in a speech in Miami Thursday called for lower U.S. interest rates, saying he would support a rate cut at the September FOMC meeting. Waller said he anticipates additional rate cuts over the next three to six months, with the pace driven by incoming data. Waller said the chances of an undesirable weakening in the labor market have increased, and proper risk management means the FOMC should be cutting rates now. Waller is reportedly in the running to be the next Federal Reserve chairman.
Brazilian President Luiz Inacio Lula da Silva has authorized the start of a process to retaliate against the 50% U.S. tariffs, Brazil’s Vice President Geraldo Alckmin said, according to a Bloomberg report. The U.S. government will be formally notified of the decision today, according to a person familiar with the matter. The move was reported earlier by the O Estado de S. Paulo newspaper. Brazil’s Chamber of Foreign Trade now has up to 30 days to analyze the U.S. tariffs and determine whether they fall under the reciprocity law passed by Brazil’s congress earlier this year. If the chamber approves, a group of ministries will study which countermeasures to apply.
Bloomberg reported Thursday that Beijing made a quiet outreach to New Delhi in March to test the waters on improving ties. Chinese President Xi Jinping wrote a letter to his Indian counterpart, Droupadi Murmu, expressing concern about any U.S. deals that would harm China’s interests, an official in New Delhi familiar with the matter said. China’s Foreign Ministry said today that Xi’s meeting with Modi in Kazan, Russia in October last year led to a restart in relations. “The competent authorities of China and India have earnestly implemented the important consensus reached by the leaders of the two countries, promoted the resumption of institutional dialogue and conducted normal exchanges,” it said and as reported by Bloomberg.
CORN: December corn saw followthrough buying overnight. Bulls are once again knocking on the door of 40-day moving average resistance at $4.13 1/4. Support comes in at $4.08 1/2 on a reversal lower.
SOYBEANS: November soybeans continue to consolidate in an apparent bull-flag on the daily bar chart. Resistance persists at the psychological $10.50 mark, while bulls are seeking to maintain prices above yesterday’s low of $10.39 3/4.
WHEAT: December SRW wheat saw action on either side of unchanged overnight. Bulls are looking to overcome 20-day moving average resistance at $5.32 1/2, which capped gains earlier this week. Support comes in at $5.24 1/4 on a reversal back lower.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Cattle futures are expected to open with a mostly firmer tone, though a continuation of selling pressure from Thursday could limit gains after the open. Volatility continues to plague the cattle market as open interest is falling amid record high prices. Cash cattle looks to be about steady with a week ago though movement remains light so far this week. Wholesale beef ended Thursday mixed, as Choice cutout climbed $2.57 to $414.41 while Select dipped $1.87 to $385.84.
HOGS: Lean hog futures are expected to open higher in a continuation of recent strength. The technical posture has quickly shifted to favor the bulls. The cash market and futures continue to go in opposite directions, which could weigh on futures after the open. The CME lean hog index is down another 20 cents to $106.43 as of Aug. 27. Pork cutout slid 17 cents to $111.49 on Thursday, led by losses in picnics.