Ahead of the Open | October 19, 2021
GRAIN CALLS
Corn: Steady to 1 cent higher.
Soybeans: 3 to 5 cents higher.
Wheat: 5 to 7 cents higher.
GENERAL COMMENTS: Corn futures overnight rose to the highest levels in over a week and soybeans also extended the recent corrective gains. Wheat futures led overnight price gains. Malaysian palm oil futures rose nearly 2.0%, while front-month Nymex crude oil futures pushed above $83.50 before pulling back from the highs. The U.S. dollar index fell near a three-week low.
Weather and crop conditions in Brazil continue to improve. As a result, Crop Consultant Michael Cordonnier increased his subjective crop ratings a point for the Brazilian soybean crop to a 6 out of 10. His Brazilian full-season corn crop rating is also a 6, unchanged from last week.
As for Argentina, crop prospects are not as strong, Cordonnier said, with “dryness becoming an increasing concern.” While it’s still very early in the growing season, Cordonnier lowered his Argentine corn rating to a 4/5 out of 10. He has not yet rated the Argentine soybean crop since less than 1% has been planted.
Farmers need more space to grow crops to meet mounting demand for food and renewable fuel at a time of slowing growth in yields, consultancy AgResource said today. A renewable fuel push under U.S. President Joe Biden's climate agenda is set to trigger a boom in soyoil use, reinforcing a worldwide picture of rising consumption of staple crops driven by China, Dan Basse, president of consultancy AgResource Co, told the GrainCom conference in Geneva.
Ukrainian farms have harvested 52 million MT of grain from almost 73% of its sown area, with the yield averaging 4.48 MT per hectare, the country’s ag ministry said today. The volume includes 32.3 million MT of wheat and 6.9 million MT of corn.
Japan is seeking 81,318 MT of wheat from the U.S. and Canada in its regular weekly tender.
CORN: December corn futures overnight reached $5.34 3/4, the highest intraday price since $5.38 3/4 on Oct. 8. Futures gained for the fourth straight day on growing conviction the market may have established a harvest low. Late yesterday, USDA reported 52% of the corn harvest was completed as of Sunday, up from 41% a week ago but slightly below trade expectations for about 54%. Chart levels to watch include last week’s low at $5.06 3/4, the 50-day moving average around $5.35 1/4 and the 200-day moving average around $5.20 1/4.
SOYBEANS: November soybeans rose as high as $12.29 overnight, the highest intraday price since $12.30 3/4 on Oct. 12, extending yesterday’s gains. The U.S. soybean harvest was 60% complete as of Sunday, up from 49% a week earlier, USDA reported. Progress was below trade expectations for harvest to be about 63% complete, based on a Reuters survey of analysts. Chart levels to watch include last week’s low at $11.84 1/2, a 6 1/2-month low, and the 20-day moving average at $12.45 1/2.
WHEAT: December HRW futures rose to a two-week intraday high at $7.57 1/4 overnight, while December SRW futures rose as high as $7.45 1/4, the highest intraday price since $7.46 1/2 on Oct. 8, amid ongoing concern over tight global supplies. The U.S. winter wheat crop was 70% planted as of Sunday, up from 60% the previous week and close to the five-year average of 72%. Planting progress fell short of trade expectations, which were about 73%. Chart levels to watch in December HRW include $7.64 1/4, the high so far for October. Chart levels to watch in December SRW include to 10-day moving average around $7.34 1/4 and the intraday high for October at $7.63 1/2.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-firm
CATTLE: December live cattle appear poised for a breakout above last week’s six-week highs behind a firmer cash market, though eroding wholesale beef prices may limit futures upside. Choice cutout values fell 15 cents yesterday to an average of $280.09, near a 2 1/2-month low reached last week. Cash trade so far this week has been quiet. Live steers in top U.S. feedlot regions last week averaged $123.84, up 0.7% from the previous week’s average of $122.96 and the second straight weekly gain. Traders await USDA’s Cattle on Feed Report on Friday. In the previous report, USDA reported an unexpected 2.3% year-over-year increase in feedlot placements in August. Chart levels to watch include last week’s intraday high at $130.60 and the 100-day moving average around $131.10, along with last week’s low of $128.55.
HOGS: Firmer technicals may help lean hog futures extend yesterday’s climb to a one-week high close, though cash fundamentals remain largely soft. Pork carcass cutouts fell 54 cents yesterday to $100.78, the lowest daily average since $98.30 on March 12. Movement totaled almost 345 loads. Carcasses on a national direct basis fell 9 cents to $67.24. The CME lean hog index is quoted another 71 cents lower at $86.88 today, the lowest since early March but still over $8.00 above December futures. While margins are deep in the black and market-ready hog numbers are under year-ago, packers aren’t having to pay up to get needed supplies. Chart levels to watch in December lean hogs include last week’s low at $77.25, the lowest intraday price since $75.65 on Sept. 24 and just above the top of a Sept. 27 chart gap at $77.20. Other chart levels to watch include the 40-day moving average around $79.50 and the 200-day moving average around $78.20.
