Ahead of the Open | October 28, 2021

( )

GRAIN CALLS

Corn: 1 to 2 cents lower.

Soybeans: 3 to 4 cents lower.

Wheat: HRW and SRW 1 to 4 cents lower, spring wheat 3 to 5 cents higher.

GENERAL COMMENTS: Grain and soybean futures fell overnight, with the exception of spring wheat, and may extend declines after USDA’s weekly export sales figures were under or at the low end of trade expectations. Malaysian palm oil futures fell for the second day, while front-month Nymex crude oil futures dropped over $1 to a two-week low. The U.S. dollar index is mildly weaker this morning.

More rain is forecast for the Midwest, slowing down harvest. A large, strong upper-level low pressure area is organizing in the southwestern Corn Belt and will promote “significant” rain tonight through tomorrow, World Weather Inc. said. Also, last night’s GFS model run boosted precipitation from northern Kansas through the southern Corn Belt Monday into next Wednesday.

Russia will harvest more than 123 million MT of grain in 2021, the agriculture minister said today, cutting the official estimate after months of being more positive about the crop than many analysts have been. The ministry had previously expected this year's crop to reach 127.4 MT.

China’s average pork price in 16 provincial regions fell 15% in September and was down 62% versus year-ago, according to ag ministry data. Chinese domestic pork and hog prices continue to fall amid increased supplies and a decline in demand.

Saudi Arabia tendered to buy 655,000 MT of optional origin hard wheat. Pakistan cancelled a tender to buy 90,000 MT of optional origin wheat and issued another tender for the same amount.

The U.S. economy grew at its slowest pace in more than a year in the third quarter, with GDP at a 2% annualized rate, the Commerce Department reported. The growth was slower than what economists expected and was well below the 6.7% pace of growth the economy experienced in the second quarter of this year.

 

CORN: USDA reported net U.S. corn sales totaling 890,400 MT for the week ended Oct. 21, down 30% from the previous week and down 10% from the average for the previous four weeks. Sales were at the low end of expectations from 800,000 MT to 1.3 MMT. December corn held in a tight range overnight after surging 13 3/4 cents yesterday to $5.57 1/4, the contract’s highest closing price since $5.65 on Aug. 18. Market bulls have gained a near-term technical advantage. Resistance is seen at yesterday’s high at $5.63 1/4 and at $5.70.

SOYBEANS: Net U.S. soybean sales totaled 1.183 MMT for the week ended Oct. 21, down 59% from the previous week and down 22% from the four-week average. China accounted for 1.081 MMT, including 449,000 MT switched from “unknown” destinations. Sales fell short of trade expectations ranging from 1.25 to 2.0 MMT. January soybeans overnight fell as low as $12.43.

WHEAT: Net U.S. wheat sales totaled 269,300 MT for the week ended Oct. 21, down 26% from the previous week and down 31% from the average for the previous four weeks. Sales were at the low end of expectations ranging from 200,000 to 550,000 MT. December HRW futures overnight fell as low as $7.76, after rising 5 1/2 cents yesterday to $7.82 3/4, the highest close for a front-month contract since May 2014. Market bulls have a solid near-term technical advantage.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE: Futures may extend a rally to eight-week highs behind strengthening cash markets. USDA yesterday reported live steers in five top feedlot areas at an average of $125.09, up from last week’s average of $124.39. Wholesale beef prices are also trending higher despite yesterday’s drop. Choice cutout values fell $1.13 to $283.63, down from the nearly three-week high earlier this week. Movement totaled about 162 loads. USDA reported net weekly beef sales of 19,200 MT, up 39% from the four-week average. South Korea and China were prominent buyers at 6,200 MT and 4,500 MT, respectively.

December live cattle futures yesterday rose 12.5 cents to $131.575, the contract’s highest closing price since $132.20 on Sept. 2. Market bulls have a near-term technical advantage, with live cattle in a four-week up-trend. Upside objectives include closing December live cattle above solid resistance at $134.00. First resistance is seen at $132.00, then at $133.00. Other chart levels to watch include the 100-day moving average around $131.20.

HOGS: Futures may remain under pressure from poor cash fundamentals and technical breakdown on daily charts, with the December contract nearing seven-month lows hit in mid-September. The CME lean hog index is at $81.67, down 99 cents from the previous quote and the lowest since late February. Pork cutout values fell another 85 cents yesterday to $93.47, the lowest since $91.41 on March 3, though movement was strong at 356 loads, suggesting prices may be near a bottom. Carcasses on national direct markets dropped 62 cents to $63.19. Net weekly pork sales totaled 29,500 MT, up 41% from the previous week but down 1.0% from the four-week average. 

December lean hog futures fell 60 cents yesterday to $71.975, the lowest closing price since $71.925 on Feb. 19. Market bears have a solid near-term technical advantage. Downside objectives include closing December below support at the September low of $71.275, which is initial support, followed by $70.00.

 

Latest News

H&P Report negative compared to pre-report expectations
H&P Report negative compared to pre-report expectations

Nearly every category topped the average pre-report estimates.

After the Bell | March 28, 2024
After the Bell | March 28, 2024

After the Bell | March 28, 2024

Pro Farmer's Daily Advice Monitor
Pro Farmer's Daily Advice Monitor

Pro Farmer editors provide daily updates on advice, including if now is a good time to catch up on cash sales.

PF Report Reaction: Bullish USDA data for corn
PF Report Reaction: Bullish USDA data for corn

Corn planting intentions and March 1 stocks came in lower than expected.

Report Snapshot: USDA shows lighter-than-expected corn acres and stocks
Report Snapshot: USDA shows lighter-than-expected corn acres and stocks

USDA reported corn acres of 90.036 million acres for 2024 and March 1 stocks of 8.347 billion bu., both well below trade estimates. Soybean acres were slightly lower than expectations, while stocks were higher.