GRAIN CALLS
Corn: 2 to 3 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: 3 to 7 cents lower.
GENERAL COMMENTS: Grain and soybean futures fell overnight. Corn and wheat extended a corrective setback from the rallies earlier this week. Malaysian palm oil futures rose over 2.0%, while front-month Nymex crude oil fell more than $2.00. The U.S. dollar index is near unchanged this morning.
The two-day Federal Open Market Committee (FOMC) meeting concludes today, with the Fed expected to announce intentions to taper its monthly bond purchases as the economy continues recover from the pandemic.
World Weather Inc. sees a “more active” pattern, including a strong area of low pressure, that may bring “significant” precipitation to the Northern Plains Nov. 10-11, with Montana also possibly receiving moisture. A storm system or series of storm systems may also develop in the Corn Belt, Delta and Southeast Nov. 10-14, potentially causing some harvesting delays.
Conditions will continue to be mostly favorable for crops in Argentina and Brazil the next two weeks, World Weather said. Argentina’s weather will trend drier Nov. 6 after some needed rainfall occurs today through Nov. 5. “The dryness in Argentina will then continue through at least the middle portion of next week, which will raise the importance of more meaningful rain occurring later in November.
Argentine farmers have sold 33.1 MMT of soybeans from the 2020-21 season, the agriculture ministry said yesterday in a report that included data through Oct. 27. As of the same date last year, sales of 34.4 MMT had been registered.
CORN: December corn fell as low as $5.67 3/4 overnight, the second daily decline after a 6-cent drop yesterday. Corn may face further profit-taking pressure today, especially if wheat markets continue to slip. The market awaits the Energy Department’s weekly ethanol production report later today and tomorrow’s USDA weekly export sales report. Last week’s ethanol report showed production at the second highest level on record. Market bulls hold a near-term technical advantage, with upside targets including closing December futures above solid resistance at the August high of $5.94 1/4 (futures yesterday reached $5.86). For bears, downside targets include closing December futures below support at $5.55. Other chart levels to watch include $5.86, yesterday’s high and the highest intraday price since $5.94 1/4, the August high.
SOYBEANS: January soybeans fell slightly overnight while holding within the narrow trading range of the past week, bounded roughly on the bottom by the 10-day moving average around $12.46 1/4 and on the top by the 40-day moving average at $12.61. Harvest pressure is winding down, but the market likely needs fresh export news to push above the recent range, including last week’s high at $12.66 1/4. Support is seen at this week’s low of $12.36 3/4 and at last week’s low of $12.26 1/2.
WHEAT: December SRW futures fell as low as $7.86 1/4 overnight after shedding 5 3/4 cents yesterday to $7.91 1/2. Futures posted a contract high earlier yesterday at $8.07 before fading to end lower, a potentially bearish technical signal. The fundamental picture remains supportive amid tightening global supplies and strong demand, along with weaker-than-expected U.S. winter wheat crop conditions. Bulls also retain a solid technical advantage, with upside targets in December SRW including a close above solid resistance at $8.25.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weak
CATTLE: Live cattle should find support from cash market strength after December futures rose $1.10 yesterday to $129.95. Cash cattle traded around $128 in the Southern Plains and $130 in Nebraska yesterday, based on unconfirmed reports. Those prices would be up around $2 from last week’s sales levels in those areas. Choice beef cutout values rose $1.86 yesterday to $287.58, near a four-week high. Movement was light at 82 loads. Weakness in corn futures may support feeder cattle. Bulls and bears are on a level near-term technical playing field, with bulls aiming to close December live cattle futures above solid resistance at $133.00. For bears, downside objectives include closing December under solid support at $127.00. Other chart levels to watch include last week’s high at $131.925 and the Oct. 22 low at $128.25.
HOGS: Lean hog futures closed at the lowest price in almost a week yesterday as weak cash fundamentals continued to weigh on the market. The CME lean hog index is down 12 cents to the lowest since Feb. 22. Pork cutout values rose $1.77 yesterday to $94.21 but remain near an eight-month low. On national direct markets, carcasses fell 5 cents to $60.98. Meatpackers slaughtered 951,000 head of hogs so far this week, down 0.7% from the same period last week and down 3.3% from the same period a year ago, USDA reported. Lean hog bears have an overall near-term advantage, with prices in a four-week-old downtrend on the daily bar chart. The next downside objective for bears is closing December below solid support at the September low of $71.275. The next upside price objective for the bulls is closing December above solid resistance at $79.00. Other chart levels to watch in December lean hogs include last week’s high at $77.25 and the 20-day moving average around $76.80.