GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 8 to 10 cents higher.
Wheat: 5 to 8 cents higher.
GENERAL COMMENTS: After lackadaisical followthrough during yesterday’s session, bulls showed up again overnight, bringing corn, soybeans and wheat near key resistance again. Followthrough during today’s session will be key. Front-month crude oil futures are trading solidly lower this morning and are back below $90. The U.S. dollar index is down nearly 300 points this morning.
President Donald Trump on Monday signed an executive order that eases restrictions on the use of red or dyed diesel, which is exempt from the federal excise tax, for on-road vehicles without penalties. Dyed diesel is available for off-road use in farm equipment. The move means farmers could use dyed diesel in on-road vehicles. The order defers payment of the federal excise tax for on-road use of dyed diesel for the remainder of the year and directs USDA Secretary Brooke Rollins to ensure farmers’ access to the fuel in high-demand areas. New York diesel futures were 2.9% lower Tuesday morning
Corn and soybean crop conditions both deteriorated over the past week, according to USDA’s weekly Crop Progress report released Monday afternoon, with corn seeing the worst of it amid persistently wet weather in the western Corn Belt. USDA said 54% of the corn crop was rated “good” or “excellent” as of Sunday. Analysts surveyed by Bloomberg, on average, had expected the percentage to remain unchanged from the previous week at 57%. USDA said 23% of the crop was harvested, up from 18% a week ago but below the average estimate of 25% and behind the five-year average for this time of year at 27%. The Pro Farmer Crop Condition Index (0 to 500 scale, 500 equals perfect) showed a 2.34 point decline as most states in the central Corn Belt saw conditions weaken. USDA said 57% of the soybean crop was rated good to excellent, down a point from a week ago and also a point below the average guess. Harvest was pegged at 25% complete, up from 17% a week ago and behind the average guess of 27% and the five-year average of 33%. The Pro Farmer CCI for soybeans fell 2.48 points to 352.77.
As harvest gets underway, rising global bond yields and higher interest rates are altering the financial equation for crop storage. Holding grain in the bin comes with significantly higher opportunity costs—whether paying higher interest on operating loans or missing out on paying down debt. That doesn’t mean storage is a bad decision, but it can be a more expensive one. Read the full story on Pro Farmer on how to calculate true storage costs.
CORN: December corn futures are again poking above $5.00. That mark has been key resistance the past few sessions. Additional resistance stands at $5.03 1/4. Support lies at $4.95 3/4 on a reversal lower.
SOYBEANS: November soybeans continue to try to work higher. Bulls are looking to close prices above resistance at $12.93 3/4. Support comes in at $12.78 on a reversal lower.
WHEAT: December SRW wheat poked above $7.00 overnight. Bulls are looking to build on that strength and challenge 40-day moving average resistance at $7.04 3/4. Tentative support comes in at $6.96, while additional selling would find support at $6.83 3/4.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live and feeder cattle futures are expected to open with a mostly firmer tone supported by technical strength. December futures closed in the lower end of the recent range Monday, which could spur corrective strength. Still, losses in the cash cattle market could weigh on futures as last week’s cash cattle average fell another 87 cents to $219.80. Meanwhile, choice beef surged $4.07 to $378.26 Monday, negating some of last week’s losses.
HOGS: Lean hog futures are expected to open higher in a continuation of recent strength, though losses in the cash market could weigh on futures. The CME lean hog index is down another 57 cents to $79.63 as of Oct. 2, extending the seasonal slide. Still, December futures posted a technical breakout of the recent downtrend on the daily bar chart, which could draw additional buyers as funds are heavily short. Pork cutout climbed $1.53 to $86.01 Monday, led by losses in loins and picnics.