Ahead of the Open | November 9, 2022

GRAIN CALLS

Corn: 1 to 3 cents lower.

Soybeans: Steady to 2 cents lower.

Wheat: 1 to 4 cents lower.

GENERAL COMMENTS: Corn futures extended a slide to near six-week lows overnight and SRW wheat fell to a seven-week low as traders readied for USDA’s Crop Production and Supply & Demand Reports at 11 a.m. CT. Soybeans also faced mild pressure. Malaysian palm oil fell 3.8% on concerns over higher stockpiles and China’s Covid restrictions. Front-month crude oil weakened slightly. U.S. stock index futures signal a weaker open, while the U.S. dollar index is up more than 500 points.

USDA reported daily soybean sales of 264,000 MT for delivery to China and 198,000 MT for delivery to “unknown destinations,” both for the 2022-23 marketing year. On Tuesday, USDA reported soybean sales totaling 414,700 MT to China, Mexico and unknown destinations. 

USDA is expected to make modest revisions to its corn and soybean crop estimates in its Crop Production Report at 11 a.m. CT. Relatively modest shifts are also expected to the 2022-23 U.S. balance sheets, with ending stocks for corn, soybeans and wheat all anticipated to increase. The biggest movement is likely to come in global wheat crop estimates.

Brazil is now expected to produce a record 153.5 MMT of soybeans this year, up 1.2 MMT from its prior forecast, according to Conab. The Brazilian crop estimating agency raised its soybean acreage forecast by 350,000 hectares. Amid the expected higher crop size, Conab raised its 2022-23 Brazilian soybean export forecast by 570,000 MT to 96.45 MMT. Conab cut its Brazilian corn crop projection by 540,000 MT to 126.4 MMT. The agency maintained its 2022-23 corn export forecast at 45 MMT. Conab raised its Brazilian wheat crop forecast by 140,000 MT to a record 9.5 MMT.

France’s ag ministry trimmed its forecast for 2022-23 French wheat exports outside the European Union to 10 MMT, down 100,000 MT from its prior outlook. The ag ministry also lowered its forecast for wheat exports within the 27-nation bloc to 6.94 MMT, down 130,000 MT from its previous figure

Algeria purchased 480,000 MT of optional origin milling wheat, the bulk of which is expected to be sourced from Russia. Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil. Japan is seeking 70,000 MT of feed wheat and 40,000 MT of feed barley.

CORN: USDA is expected to lower its estimate for U.S. corn production to 13.887 billion bu. from 13.895 billion bu., based on a Reuters survey of analysts. U.S. corn stocks at the end of 2022-23 may be revised up about 35 million bu. to 1.207 billion bu.

December corn overnight fell as low as $6.65, the contract’s lowest intraday price since $6.61 1/2 on Sept. 28. A decisive move under that level could signal a downside breakout from the trading range that’s persisted for nearly two months.

SOYBEANS: USDA is expected modestly increase its estimate for U.S. soybean production to 4.315 billion bu. from 4.313 billion bu., based on the Reuters survey. U.S. 2022-23 ending stocks may be boosted about 12 million bu. to 212 million bushels. January soybeans overnight traded within the previous day’s range and face initial support at the 10-day moving average around $14.36.

WHEAT: In USDA’s Supply and Demand update, estimated global wheat endings stocks for 2022-23, already at a six-year low, may be reduced further to about 266.52 MMT from 267.54 MMT, based on the Reuters survey. USDA is expected to modestly raise projected U.S. ending stocks by about 2 million bu. to 578 million bu., which would still be the lowest in 15 years.

December SRW wheat overnight fell as low as $8.21 1/4, the contract’s lowest intraday price since $8.19 1/4 on Sept. 19.

LIVESTOCK CALLS

CATTLE: Steady-mixed

HOGS: Steady-weaker

CATTLE: Live cattle face mixed prospects following Tuesday’s flat close in futures and a slow-developing cash market. Packers have been slow to establish bids for slaughter-ready animals, while feedlots are asking around $2 higher in the Southern Plains. The impending winter storm doesn’t appear to be advancing cash negotiations any in the northern market where some locations could see blizzard-like conditions late this week. Firmer cash trade is eventually expected to surface, though it appears late-week action is likely. Strong wholesale beef trade may support futures. Choice beef cutout values rose 39 cents Tuesday to $264.94, near a three-month high reached last week. Movement was strong at 151 loads. December live cattle ended unchanged Tuesday at $153.05.

HOGS: Lean hog futures may face followthrough pressure from Tuesday’s sizable declines and a continued slump in cash fundamentals tied to a seasonal rise in slaughter. The CME lean hog index is down another 60 cents to $90.28 (as of Nov. 7), the lowest since mid-February, though the national direct cash hog price firmed $2.45 on Tuesday. Further gains in direct prices could suggest a short-term low in the CME index. Wholesale pork remains under pressure. Pork cutout values fell $1.92 Tuesday to $95.03, the lowest since early February. December lean hogs fell $1.475 to $85.575.