Ahead of the Open | October 27, 2022
GRAIN CALLS
Corn: 2 to 3 cents higher.
Soybeans: 4 to 7 cents higher.
Wheat: HRW and SRW 8 to 14 cents higher, spring wheat 7 to 9 cents higher.
GENERAL COMMENTS: Winter wheat futures rose to highs for the week overnight on global supply concerns. Corn and soybean futures followed wheat higher. Malaysian palm oil futures rose 0.7% as the market narrowed a gap with U.S. soyoil prices, while front-month crude oil futures were up more than $1. U.S. stock index futures signal a firmer open, while the U.S. dollar index is up around 650 points this morning after earlier falling to a five-week low.
Argentina will experience frost and freeze conditions Monday and Tuesday that may damage some winter and early summer crops,” World Weather Inc. said. “Argentina rainfall will become very limited once again after showers occur in the east this weekend ahead of the big cold surge,” the forecaster said.
U.S. HRW wheat areas will get a restricted amount of rainfall during the next week with the exception of southern Oklahoma and north-central Texas, which could receive 1.0 to 2.0 inches, World Weather said. Most of the northern and central Plains and northern and western Midwest will be dry for a week, followed by “a more active weather pattern,” the forecaster said.
Russia on Thursday said that provisions of the Black Sea grain deal to ease Russian agricultural and fertilizer exports were not being met, and that Moscow was yet to make a decision on whether the agreement should be extended beyond the Nov. 19 deadline. Foreign Ministry Spokeswoman Maria Zakharova told reporters the West had not taken sufficient steps to ease sanctions to facilitate Russian exports.
Chinese President Xi Jinping said Beijing is willing to work with the U.S. to find ways to get along to the benefit of both, Chinese state television reported on Thursday, ahead of a possible meeting with President Joe Biden in Indonesia next month. As major powers, China and the United States should strengthen communication and cooperation to help provide stability to the world, Xi said.
China’s economy is facing growing risks of slowing external demand in the fourth quarter, a commerce ministry spokesperson said. As the world economy loses momentum and central banks tighten monetary policy to tame inflation and curb demand, the environment for trade is getting increasingly complex for China.
China will auction another 40,000 MT of wheat from state-owned reserves on Nov. 2. China sold the entire volume of wheat put up for sale during the first two auctions earlier this month. It has not released results yet for yesterday’s auction.
CORN: USDA reported net U.S. corn sales of 264,000 MT for 2022-23 during the week ended Oct. 20, down from 408,300 MT the previous week and below trade expectations ranging from 350,000 MT to 1.0 MMT. The sales were primarily for China at 157,800 MT, including 66,000 MT switched from “unknown destinations.”
WHEAT: Net weekly wheat sales totaled 533,200 MT, up sharply from 163,100 MT the previous week and above trade expectations ranging from 100,000 to 450,000 MT. This marked second largest weekly wheat sales of the marketing year.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
USDA reported net weekly U.S. beef sales totaling 14,100 MT for 2022, down from 16,600 MT the previous week.
HOGS: Lean hog futures face a mixed outlook with slippage in the wholesale pork market potentially offsetting recent cash strength. Pork cutout values fell 75 cents Wednesday to $97.74, with a drop of $3.69 in bellies driving the market to the lowest daily average in nearly four weeks and 15 cents above the Sept. 30 low. The fall low typically doesn’t come until November or December as pork production reaches its peak. For the September low to hold, ham prices likely must stabilize after dropping more than $4 over the past week. That’s possible as retailers may be looking for holiday replacements for turkey given tight supplies. The CME lean hog index is down 34 cents to $94.47, still near a four-week high. December lean hogs rose 5 cents Wednesday to $88.50.
Net weekly U.S. pork sales totaled 20,300 MT for 2022, down from 40,800 MT the previous week. Lead buyers included Mexico at 16,900 MT and China at 5,600 MT.