Ahead of the Open | October 20, 2021
GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 7 to 10 cents higher.
Wheat: 2 to 6 cents higher.
GENERAL COMMENTS: Soybean futures rose for a fifth consecutive session on growing export optimism and beliefs the market has established a harvest low. Corn and wheat also rose. Malaysian palm oil futures rose over 2.0%, while Nymex crude oil futures fell nearly 1.0%. The U.S. dollar index was little-changed.
China's soybean imports from Brazil fell 18% in September from a year earlier as poor crush margins limited demand, Reuters reported, citing customs data. The world's top buyer of soybeans brought in 5.936 million tonnes of the oilseed from Brazil last month, down from 7.25 million in the corresponding period a year earlier, data from the General Administration of Customs showed.
Ukraine’s ag ministry and exporters agreed on a wheat export quota of 25.3 MMT for 2021-22, up from 17.5 MMT last year. While this is called a “quota,” it’s not a hard cap and is really just a reasonable level of what the country expects to ship during the marketing year.
Heavy, persistent rains in recent weeks have slowed harvest efforts and delayed wither wheat planting in key production regions of China. Harvest is running four percentage points behind average and winter wheat seeding is a point behind normal.
China’s customs office has approved beef imports from Russia, effective Oct. 18. The beef must come from cattle under 30 months of age. China’s appetite for beef expanded after domestic pork prices surged in the aftermath of the country’s African swine fever outbreak.
CORN: December corn rose as high as $5.34 3/4 a bushel overnight after falling 2 1/2 cents yesterday. Chart levels to watch include yesterday’s high at $5.37, the highest intraday price since $5.38 3/4 on Oct. 8, and last week’s low at $5.06 3/4. The trade awaits USDA’s weekly export sales report tomorrow for further confirmation of a recent pick-up in demand.
SOYBEANS: November soybeans overnight rose as high as $12.39, 1/4 cent under yesterday’s one-week high. Surprisingly strong weekly USDA soybean export inspections early this week have fueled ideas the recent price slump is sparking fresh overseas buying and the market may have established a harvest low. Chart levels to watch include last week’s low at $11.84 1/2, a 6 1/2-month low, and $12.62 1/2, the high for October.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE: Wholesale beef prices appear to be stabilizing after a prolonged slump, which may help generate fresh in futures. Choice cutout values yesterday rose 79 cents to $280.88, up from a 2 1/2-month low of $280.02 Oct. 13. Movement totaled 147 loads. On cash cattle markets, some feedlots asked around $126 in the Southern Plains, but no asking prices have surfaced in the northern market and packers have yet to establish their initial bids. USDA reported live steers in five top feedlot regions at an average of $125.00 yesterday, up from last week’s average of $123.84. The market awaits USDA Oct. 22 Cattle on Feed Report. In last month’s report, USDA reported an unexpected 2.3% year-over-year increase in feedlot placements in August.
On the charts, December live cattle reached a six-week high early yesterday before reversing course to end lower and posted an “outside day” down on the daily bar chart, a bearish signal. Chart levels to watch include yesterday’s high at $131.125 and last week’s low of $128.55.
HOGS: Cash hog fundamentals remains weak, with pork carcass cutouts fell another $1.44 yesterday to $99.34, the lowest daily average since $98.30 on March 12. The latest CME lean hog index fell 71 cents to $86.88, the lowest since $86.76 March 9, but still over $9.00 above December futures. National direct carcasses also remained under pressure, averaging $66.97, down 27 cents. While packer margins are strong and market-ready hog numbers are under year-ago, meat processors aren’t having to pay up to get needed supplies. December lean hogs yesterday closed near last week’s low of $77.25, which is the lowest intraday price since $75.65 on Sept. 24 and just above the top of a Sept. 27 chart gap at $77.20.
