GRAIN CALLS
Corn: 2 cents lower to 2 cents higher
Soybeans: 5 to 9 cents lower
Wheat: 4 cents lower to unchanged
GENERAL COMMENTS:
The grains complex traded mostly lower overnight after a positive day yesterday. A slightly weaker U.S. dollar and higher crude oil prices this morning are signs that outside markets may be helpful to grains today. The nearing WASDE report from USDA will be the most important data received for these markets since the government shutdown began.
The U.S. Senate overnight passed a temporary funding measure to end the longest U.S. government shutdown in history, with a vote of 60-40, after a group of centrist Democrats backed the bill. The measure, which keeps most of the government open through Jan. 30 and some agencies through Sept. 30, now needs to be approved by the Republican-controlled House of Representatives, which is expected to consider it on Wednesday. The bill would pay all federal workers who were denied pay during the shutdown and forbid any federal layoffs through Jan. 30. Democrats are criticizing the deal for dropping the party’s demand to renew expiring Affordable Care Act subsidies.
President Trump said he “at some point” would reduce the tariff rate on Indian goods, saying the U.S. is getting “pretty close” to a trade deal with India, Bloomberg reported. Trump predicted the nations were “pretty close to doing a deal that’s good for everybody” and said India has stopped buying Russian oil, with purchases “reduced very substantially.” Trump said the new U.S. ambassador to India, Sergio Gor, will work to “fortify our country’s bonds, promote investments in key U.S. industries and technologies, increase American energy exports and expand our security cooperation.” Trade teams from both India and the U.S. have met multiple times since the easing of tensions and officials in New Delhi have expressed cautious optimism that a deal with the U.S. is in sight. Trump was speaking Monday at the swearing-in for Sergio Gor, the former head of his personnel office who is now becoming the U.S. ambassador to India.
Gold and silver markets overnight extended Monday’s sharp gains and hit three-week highs, in anticipation of further Federal Reserve interest rate cuts following a likely deal to end the longest government shutdown in U.S. history. A restart of the government would see the release of long-delayed U.S. economic data, which is expected to show a worsening outlook and likely be a catalyst for more Fed easing of its monetary policy as soon as the December FOMC meeting.
CORN: December corn fell from the psychological resistance of $4.30 yesterday, with firmer resistance standing at $4.36. The 40-day moving average of $4.23 serves as initial support for corn.
SOYBEANS: January soybeans pushed above the $11.25 mark yesterday but fell back below it in the overnight session. Today the soybean bulls will work to push higher than the resistance seen at $11.30 yesterday. Initial support for soybeans is found at the 10-day moving average of $11.18 1/2.
WHEAT: Key resistance for December SRW wheat stands around the $5.36 mark, a level that futures have bounced off of multiple times before this year. The next resistance for wheat is found at $5.54 1/2, a high the contract fell from last week. Wheat finds initial support at the psychological $5.25 level, and firmer support at $5.18.
LIVESTOCK CALLS
CATTLE: Choppy to higher
HOGS: Choppy
CATTLE: Cattle futures are expected to open with a neutral to slightly positive trend. Feeder contracts posted a limit-up day in yesterday’s session, showing technical strength from short-covering at the end of last week continues to persist. The cash cattle price last week averaged $228.70, down $2.16 from the previous report. Cash trade has not declined as much compared to futures in recent weeks, as traders are still bound by tight supplies of cattle, and are less immediately influenced by policy decisions to re-build the herd.
HOGS: Lean hog futures are expected to open mixed this morning. Hog futures notched solid gains yesterday, gaining momentum from the stronger gains in the cattle markets. Despite the reversal on the daily chart, hogs will need to show continued strength to break a weeks-long downtrend that has been in place. Seasonal weakening has limited the hog markets as of late, but multiple days of price gains may suggest that seasonality beginning to wane as we inch closer to the holiday season. The most recent CME lean hog index is down another 55 cents from the previous day to $90.05.