GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: 1 cent lower to 1 cent higher.
GENERAL COMMENTS: Late session strength propped up grain markets this morning. Markets are still reeling from the fresh data in Friday’s report, digesting what higher production could mean. Front-month crude oil futures are modestly lower this morning alongside the U.S. dollar, which is down around 345 points.
A ship was sunk by drone attack off the coast of Bulgaria Tuesday, leaving 11 sailors missing, marking what may be the second deadly sinking of a cargo vessel in the area during the past week, Reuters reports. Bulgaria summoned Russia’s ambassador. Bulgarian officials said two cargo ships were hit by drones and one was sunk. The report said that Bulgarian Prime Minister Rumen Radev stopped short of blaming Moscow for the attack but said the outcome “benefits the Russian federation.” Cargo ships, including grain carriers, have been struck near Bulgaria and Romania this month, serving to further choke off traffic from the Black Sea.
Pro Farmer crop consultant Michael Cordonnier echoed skepticism regarding the USDA’s surprise decision to lift its U.S. corn yield estimate by 2.7 bushels per acre to 181.2 bpa in October. Questioning how yield estimates could rise while crop condition ratings fell, he said production figures may be trimmed in November or January. Cordonnier raised his U.S. corn yield estimate to 180.0 bpa while calling the USDA’s 53.1 bpa soybean yield reasonable. Meanwhile, Brazil’s soybean planting is off to a record pace at 19.7% complete (versus the 11.5% average), despite El Niño concerns. Mato Grosso leads at 33.2% finished, and Paraná reached 36% despite recent rain delays. If favorable weather holds, early-planted soybeans should allow an early January harvest, opening an ideal window for planting safrinha corn.
The BofA Global Fund Manager Survey, a closely watched guide to positioning across financial markets, found commodity allocations ticked up to net 21% overweight. Fund managers expect Brent crude to trade at ~$94/bbl by year-end, up from current levels. Allocators note that a drop in oil below $80/bbl represents a potential Q4 bullish surprise for equities. Energy equity exposure sits at net 4% underweight (down from net 1% overweight). A net 4% of respondents view gold as undervalued (down slightly from 5%). A net 47% of respondents expect a “boom” (above-trend growth and inflation), while net 5% expect global CPI to decline over the next 12 months. Top tail risks include a disorderly rise in bond yields (31%) and an AI bubble (23%). Managers say the biggest potential spark for a “credit event” comes from capital spending by AI hyperscalers (39%) and government debt (28%).
CORN: December corn continues to bounce off resistance at $4.84 1/2, the 200-day moving average. That has capped strength the past three sessions. Additional strength would eye resistance at $4.92. Support comes in at Friday’s reactionary low of $4.70 1/4 on resurgent selling.
SOYBEANS: November soybeans continue to pin-ball between 40-day moving average support at $12.81 and 20-day moving average resistance at $12.93 1/2. Further selling would find support at $12.75 while additional strength would find resistance at $13.00.
WHEAT: December SRW wheat futures are consolidating near recent lows. Bulls are looking to hold support at $6.61 1/4, the 200-day moving average, which has capped losses the last couple sessions. Resistance comes in at $6.75 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live and feeder cattle futures are expected to open with a mostly firmer tone. December live cattle futures saw consolidation Monday after Friday’s surge higher, but bulls stepped in defending support at the 200-day moving average, further shifting the technical edge to the bulls. Last week’s cash cattle average ended the string of weekly declines, rising 34 cents to $220.14. Choice beef saw gains Monday as well, finishing up $2.21 at $375.56.
HOGS: Lean hog futures are expected to open with a mostly weaker tone. Lean hogs continue to trend lower on the daily bar chart with bears defending technical resistance at the 10-day moving average on Monday’s corrective bounce. The CME lean hog index has seen losses accelerate this week, falling another $1.10 to $76.51 as of Oct. 9. Pork cutout bounced $2.47 to $82.97 Monday, led by gains in hams and picnics, though all cuts excepts ribs saw gains on the day.