Ahead of the Open | October 22, 2021
GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 1 cent lower to 1 cent higher.
Wheat: 5 to 10 cents higher.
GENERAL COMMENTS: Wheat futures led overnight gains in the grain and soy complex as French wheat futures climbed to a contract high. Corn futures firmed slightly, while soybeans were mostly firmer. Malaysian palm oil futures are down nearly 1.0%, while front-month Nymex crude oil futures are up almost 1.0%. The U.S. dollar index is weaker.
USDA will release its monthly Cattle on Feed and Cold Storage reports at 2:00 p.m. CT. The number of cattle placed into feedlots in September is expected to be up 1.4%, which would be the second month in a row with placements above year-ago levels. Traders expect marketings declined by 2.7% versus September 2020. The number of cattle on feed as of Oct. 1 is expected to be down 0.6% from a year earlier.
The five-year average increase in frozen meat stocks during the month is 16.1 million lbs. for beef and 15.3 million lbs. for pork.
Recent showers in central Argentina have helped the development of the country's 2021-22 wheat crops, the Buenos Aires Grain Exchange said yesterday, although high temperatures expected over the days ahead could pose a risk going forward.
French farmers stepped up harvesting of maize and sowing of winter wheat and barley last week in dry, sunny weather, Reuters reported, citing data from farm office FranceAgriMer. An estimated 32% of the grain maize crop area had been harvested by Oct. 18, up from 15% a week earlier.
China's soybean oil prices hit a near 10-year peak this week on tight supply and robust demand, lifting key soybean crushing margins to six-month highs, despite sustained weak demand for soymeal from the country’s hog sector. The most actively traded soybean oil futures on Dalian Commodity Exchange has climbed 30% since mid-June.
CORN: December corn overnight rose as high as $5.37 1/2 and is poised to post a small gain on the week after closing at $5.25 3/4 at the end of last week. With harvest well past the halfway point, recent price gains combined with stronger exports have fueled beliefs the market has established a near-term low. Weekly export sales reported yesterday were up 67% from the average for the previous four weeks. Chart levels to watch in December futures include this week’s high and low, at $5.40 and $5.23, respectively, and the 100-day moving average around $5.46 1/4.
SOYBEANS: November soybeans reached $12.30 1/2 overnight and are on track for a weekly gain, after ending last week at $12.17 3/4. Chart levels to watch include this week’s high at $12.49 1/2 and the 10-day moving average around $12.18 3/4.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weak
CATTLE: Futures may end the week on a down note after slipping from six-week highs reached Oct. 19, though sideways trade is likely today ahead of USDA’s Cattle on Feed Report. Signs of a bottom in wholesale beef may underpin futures. Choice cutout values rose 63 cents yesterday to an average of $280.66, up from a 2 1/2-month low last week. Live steers in five top feedlot regions averaged $124.32 yesterday, up from last week’s average of $123.84. December cattle fell 97.5 cents yesterday to $129.55, down from $130.975 at the end of last week. Chart levels to watch include this week’s high at $131.125 and the 100-day moving average around $131.20.
HOGS: Futures are heading for a steep loss this week on soft cash fundamentals and technical breakdown on the charts. Pork cutout values rose $1.41 yesterday to an average of $98.28, up from a 7 1/2-month low yesterday. Movement totaled nearly 292 loads. Carcasses on national direct markets fell $1.50 to $65.43. The CME lean hog index dropped to $84.83. Meatpackers slaughtered an estimated 1.907 million head of hogs so far this week, up 0.2% from the same period last week but down 2.1% from the same period a year ago, USDA reported. December lean hog futures fell $2.825 yesterday to $73.20, the lowest closing price since $72.25 on Sept. 15. The contract is down 6.5% from $78.275 at the end of last week.
