Ahead of the Open | November 10, 2022

GRAIN CALLS

Corn: Steady to 2 cents lower.

Soybeans: 2 to 6 cents lower.

Wheat: 3 to 8 cents higher.

GENERAL COMMENTS: Corn and soybean futures traded lower overnight, while wheat futures firmed at the end of the session. Malaysian palm oil futures fell 0.4% to a 10-day closing low as China’s stringent Covid-19 policies weighed on edible oil demand, while front-month crude oil futures are up around 50 cents this morning. U.S. stock index futures signal a firmer open, while the U.S. dollar index is down more than 1,700 points, falling to a two-month low.

USDA reported daily corn sales of 209,931 MT for delivery to Mexico during the 2022-23 marketing year.

Data showed consumer prices eased more than expected in October, boosting ideas the Federal Reserve may pull back on the size of future interest rate hikes. The Labor Department said consumer prices advanced 7.7% in the 12 months through October, after rising 8.2% in September, while the core rate, which excludes volatile food and energy prices, increased 6.3% annually, down from 6.6% in September. Economists expected the CPI and core number would rise 8% and 6.5%, respectively.

The Rosario Grain Exchange slashed another 1.9 MMT off its Argentine wheat estimate, lowering it to 11.8 MMT, and warned it may have to make additional cuts. At that level, Argentina’s wheat crop would be the smallest since it produced just 10.9 MMT in 2015-16. On Wednesday, USDA cut its Argentine wheat crop forecast by 2 MMT to 15.5 MMT.

Soaring wheat prices in India could prompt price-easing measures, trade and government sources told Reuters. India could consider offloading state stocks in the market for bulk consumers such as flour and biscuit makers to reduce prices, government sources said. “We are monitoring the price situation closely and we will intervene,” a source said. “The key question is how much stock do we need to release.” The government could also drop the 40% wheat import tax, sources said.

Malaysia's palm oil stocks at the end of October expanded for a fifth month to a three-year high as production improved. Inventories in the world’s second-largest producer rose 3.74% from the previous month to 2.4 MMT, the highest since Sept. 2019, according to the Malaysian Palm Oil Board. Crude palm oil production rose for a fifth month amid the peak crop season, climbing 2.44% from September to 1.81 MMT. Exports gained 5.66% to 1.5 MMT, the industry regulator said. Imports fell 49.85%.

South Korea purchased 134,000 MT of optional origin corn. Saudi Arabia tendered to buy 595,000 MT o MT of milling wheat. Tunisia tendered to buy 100,000 MT of soft milling wheat, 100,000 MT of durum and 75,000 MT of feed barley – all optional origin.

CORN: USDA reported net weekly U.S. corn sales during the week ended Nov. 3 at 265,300 MT, down from 372,200 MT the previous week and below trade expectations ranging from 300,000 to 650,000 MT. Top buyers included Mexico (157,500 MT, including decreases of 60,700 MT). December corn overnight fell as low as $6.60 3/4 after ending Wednesday at $6.64 1/2, the contract’s lowest settlement since Aug. 26.

SOYBEANS: USDA reported net weekly U.S. soybean sales at 794,800 MT, down from 830,200 MT the previous week and the third straight weekly decline. Sales were at the low end of expectations ranging from 600,000 MT to 1.2 MMT. China was the top buyer at 927,100 MT, including 594,000 MT switched from “unknown destinations” and decreases of 13,000 MT.

WHEAT: Net weekly U.S. wheat sales totaled 322,500 MT, down from 348,100 MT the previous week and at the low end of trade expectations ranging from 250,000 to 600,000 MT. December SRW wheat overnight rebounded to $8.15 3/4 after falling 21 1/4 cents Wednesday to $8.06 1/2, the contract’s lowest close since Sept. 1.

LIVESTOCK CALLS

CATTLE: Steady-mixed

HOGS: Steady-weaker

CATTLE: Live cattle may face pressure from signs the cash market’s recent four-week run of gains is fading. Light cash cattle trade was reported around $150 in Texas on Wednesday, down around $1 from last week’s action in the state. That’s a disappointing start to cash trade, as traders expected another upturn in prices. While prices may still firm as the week’s cash activity picks up, the initial results suggest packers are digging in their heels. Choice beef cutout values fell 27 cents Wednesday to $264.67 on strong movement of 142 loads. December live cattle fell $1.475 to $151.575, the contract’s lowest close since Nov. 2.

USDA reported net weekly beef sales of 13,700 MT, primarily for South Korea (7,100 MT, including decreases of 600 MT), Japan (4,700 MT, including decreases of 300 MT) and Taiwan (1,800 MT, including decreases of 100 MT).

HOGS: Lean hog futures may face pressure from an ongoing cash market slump as scaled-up slaughter boosts pork supplies. The CME lean hog index is down 82 cents to $89.48 (as of Nov. 8), the first time it has been below $90.00 since Feb. 10. While the cash index continues to fall seasonally, the national direct cash price firmed 48 cents on Wednesday, the second straight daily rise. Pork cutout values fell $1.02 Wednesday to $94.12, the lowest daily average since Feb. 2. Movement was strong at 340 loads. December lean hog futures fell 30 cents to $85.275 on Wednesday.