Ahead of the Open | November 1, 2022
GRAIN CALLS
Corn: 1 to 2 cents lower.
Soybeans: 13 to 17 cents higher.
Wheat: HRW and SRW 2 cents lower to 1 cent higher, spring wheat 2 to 7 cents lower.
GENERAL COMMENTS: Winter wheat futures were mixed after falling earlier in the overnight session as Ukraine grain shipments continued even with Russia suspending its participation in the export agreement. Soybeans climbed to a five-week high, while corn eased. Malaysian palm oil futures rose 4.6% to close at a near 10-week high amid concerns over global vegoil supplies, while front-month crude oil jumped more than $2. U.S. stock index futures indicate a stronger open, while the U.S. dollar index is more than 750 points lower this morning.
Russia is not ending its participation in a deal to export Ukrainian grain through Black Sea ports but rather is suspending it, President Vladimir Putin said Monday. “We are not saying that we are ceasing our participation in this operation. No, we are saying that we are suspending it,” Putin told a televised news conference. “Ukraine must guarantee that there will be no threats to civilian vessels or to Russian supply vessels,” said Putin, noting that under the terms of the deal, Russia is responsible for ensuring security.
Three outbound vessels left Ukrainian ports by midday Tuesday after 12 departures and two arrivals yesterday, the UN-led coordination center said. The UN coordinator for the grain export initiative continued discussions with Ukraine, Russia and Turkey in an effort to resume full participation at the inspections center that oversees safe passage of vessels. Maritime law experts said any attempt by Russia to stop ships in international waters would violate international law, which guarantees freedom of navigation.
Protests by backers of Jair Bolsonaro intensified as the Brazilian president remained silent over his loss in Sunday’s election, refusing to concede defeat to Luiz Inacio Lula da Silva. Over 300 federal highways were partially or fully blocked, according to the police, leading a judge to order the roads cleared. As we reported in “Evening Report” on Monday, the blockades included BR-163 in Mato Grosso, the so-called “soybean highway.”
Frost was reported in portions of Argentina and in a few pockets in far southern Brazil this morning, but no serious crop damage was suspected, World Weather Inc. said. A few light freezes were noted in southeastern Buenos Aires, the impact of which should have been very low. Argentina will be dry for the next 10 days, and Brazil’s center west and southern crop areas will be dry-biased for the next 10 days.
U.S. rainfall will be greatest this weekend and early next week from Oklahoma and north-central Texas to Wisconsin, World Weather said. Eastern U.S. Midwest and southeastern states will receive below normal precipitation over the next 10 days, World Weather said.
Traders expect USDA to report soybean crush totaled 167.9 million bu. in September, according to a Bloomberg survey. That would be down 7.1 million bu. (4.1%) from August but up 3.7 million bu. (2.3%) from last year. Corn-for-ethanol use is expected to total 394.4 million bu., which would be down 37.9 million bu. (8.8%) from August and 12.7 million bu. (3.1%) less than September 2021.
South Korea purchased 65,000 MT of corn expected to be sourced from South America or South Africa and 63,000 MT of feed wheat expected to be sourced from the United States. South Korea passed on a tender to buy up to 58,000 MT of corn and 8,000 MT of soymeal.
CORN: Late Monday, USDA reported the U.S. corn harvest at 76% complete as of Sunday, up from 61% a week earlier and ahead of the 64% average for that date the previous five years. Analysts expected harvest to be about 75% complete.
WHEAT: USDA’s initial national ratings for U.S. winter wheat pegged the crop at 28% “good” or “excellent” as of Sunday, far under expectations for 41% and a record low. The crop was 87% planted, up from 79% the previous week and ahead of the 85% five-year average.
When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop starts the growing season at 265.8, the lowest initial rating ever and the lowest on record for any week ahead of dormancy. The HRW CCI rating was 76.3 points below the five-year average. The SRW crop starts the growing season with a CCI reading of 347.9, which was 17.9 points below the five-year average for the end of October.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weaker
HOGS: Nearby lean hog futures may face followthrough technical pressure from the market’s sharp drop since the middle of last week and from slipping cash fundamentals. The national direct cash hog price dropped $2.20 on Monday to $88.34, with pressure noted across all regions. Pork cutout values fell $1.40 to $99.94, driven by a plunge of nearly $24 in bellies, though with the exception of picnics, all other pork cuts posted strong gains. December lean hogs fell $1.175 Monday to $84.925, the contract’s lowest close since Oct. 14.
China’s state planner said Tuesday it will release its seventh batch of frozen pork from reserves, without providing details. China sold 200,000 MT of pork from state reserves last month to help ease surging domestic pork prices.
