Ahead of the Open | November 3, 2023
GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 11 to 13 cents higher.
Wheat: Winter wheat 3 to 5 cents higher; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn and wheat traded in a tight range overnight, though went into session highs following a surge higher after this morning’s NFP number. Soybeans saw continued strength overnight, trading a two-week high. Outside markets surged this morning after the Labor Department released payroll data, sending the U.S. dollar index sharply lower alongside bond yields. Front-month crude oil futures saw modest gains, though continue to face downward pressure.
The Labor Department reported non-farm payrolls increasing 150,000 in October versus expectations of 180,000 this morning, sharply lower from a revised 297,000 in September. The unemployment rate ticked up to 3.9% from 3.8% a month prior. The marketplace took this as bullish as a weakening job market is an indication that the Fed tightening policy is working, giving further confidence that the recent tightening cycle has come to an end.
The UN Food and Agriculture Organization global food price index inched down 0.7 point in October to the lowest level since March 2021, as declines in the price of sugar, cereal grains, vegetable oils and meat more than offset a rise in dairy. Compared to year-ago, prices declined 3.3% for meat, 20.1% for dairy, 17.9% for cereal grains and 26.1% for vegoils, while sugar prices jumped 46.6%.
The U.S. Department of Commerce announced a substantial reduction in duties on phosphate fertilizers imported from Morocco, lowering them from 19.97% to 2.12%, following an annual administrative review of the duties, which involves retroactively examining shipment prices and other factors. The National Corn Growers Association (NCGA) hailed the decision as a significant win for corn growers. Separately, in September, the U.S. Court of International Trade instructed Commerce to reassess the duty rate calculation due to flaws found in its analysis. A decision on this matter is expected on Dec. 13.
This morning, USDA reported daily sales of 131,150 MT of soybeans for delivery to unknown destinations for the 2023-24 marketing year.
CORN: December corn futures traded in a tight range overnight, though went into the break on session highs. Bulls are holding onto support from the Sept. 19 low of $4.67 3/4, below which little support remains until the $4.50 mark. Bulls are seeking to reclaim $4.74 resistance, which is backed by the 10-day moving average at $4.78.
SOYBEANS: November soybean futures surged higher overnight, especially after this morning’s NFP number. The 200-day moving average, currently at $13.16 3/4, stifled buying overnight and remains first resistance. This is backed by the Oct 20. high of $13.18 1/2, then $13.25. Bulls are seeking to hold support at $13.08 3/4, backed by the psychological $13.00 level.
WHEAT: December SRW futures traded in a tight range overnight, bulls continue to struggle with downtrend resistance at $5.66 1/2, which stands as first resistance. Bulls are seeking a daily close above this level to negate the recent downtrend stemming from the Oct. 20 high. Further resistance lies at $5.72 1/2, then the $5.80 mark. Bulls are seeking to hold support at $5.56 1/2, backed by this week’s low at $5.54 1/2.
CATTLE: Higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open with a firmer tone following Thursday’s technical breakout higher. Following three sessions of sideways trade, December futures filled last week’s gap lower. Some technical resistance from prior lows may limit buying, but bullish momentum is likely to carry over to today. Cash cattle trade has remained minimal thus far this week, but the average is $1.15 higher than last week at this point. Wholesale beef prices were mixed on Thursday, though movement was firm at 192 loads, the highest since Oct. 10. Choice cutout firmed $2.35 to $304.53 while Select fell $4.21 to $274.34.
HOGS: Lean hog futures are expected to open mostly higher following Thursday’s explosive move to the upside. December futures reversed Wednesday’s weakness and traded to the highest level since Oct. 6. The CME lean hog index continues to weaken, falling another 10 cents to $76.84 (as of Nov. 1), though the daily declines are shrinking. That seems to be giving bulls confidence that a seasonal low will occur earlier than the past couple of years. The index holds just a $3.565 premium to December futures, the tightest since mid-May. Wholesale pork prices continue to trade largely sideways, as cutout rose 91 cents to $87.41 Thursday.
