Ahead of the Open | October 29, 2021
GRAIN CALLS
Corn: Steady to 1 cent higher.
Soybeans: 2 to 4 cents higher.
Wheat: HRW and SRW 4 to 6 cents lower, spring wheat mixed.
GENERAL COMMENTS: Winter wheat futures fell overnight in a corrective pullback from this week’s rally to multi-year highs. Soybeans firmed overnight and corn was little-changed. Malaysian palm oil futures posted the second straight monthly rise on tight supplies. Front-month Nymex crude oil futures fell more than $1, while the U.S. dollar index is up sharply this morning.
USDA reported daily sales of 279,415 MT of corn for delivery to Mexico and 132,000 MT of soybeans for delivery to “unknown” destinations. It also reported 222,350 MT of soybean sales received during the reporting period for delivery to unknown destinations. All of the sales were for 2021-22.
French farmers had harvested 54% of this year's corn crop by Oct. 25, farm office FranceAgriMer said on Friday, with field work far behind the usual pace. Harvest progress had advanced from 32% a week earlier but compared with 87% at the same stage last year.
Russia raised its wheat export tax for Nov. 10-16. As we reported earlier this week, the wheat export tax of $67.00 per metric ton that went into effect Oct. 27 will be in place through Nov. 9. From Nov. 10-16, the sliding tax will increase to $69.90 per metric ton based on an indicative price of $299.99.
Argentina's 2021-22 wheat crop is expected at 19.8 MMT, the Buenos Aires Grains Exchange said yesterday, citing recent rains as its reason for increasing its previous 19.2 MT estimate. But possible dryness on the Pampas grains belt over the weeks ahead remains a concern, the exchange said.
Malaysia has agreed to raise the threshold for its palm oil windfall profit levy next year and will set the tax rate at 3% nationwide, the finance minister said. The threshold price for companies in Peninsular Malaysia will be increased to 3,000 ringgit ($725) from 2,500 ringgit.
SOYBEANS: January soybean futures rose as high as $12.55 1/2 overnight and are on track to finish above last week’s close at $12.30 3/4. Chart levels to watch include this week’s high at $12.66 1/4 and the 40-day moving average around $12.64.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firm
CATTLE: December live cattle yesterday posted the first decline in four days even as cash markets continued to strengthen, possibly signaling the month-long uptrend has lost momentum. December futures are still on track to finish up from last week’s close at $128.325 and post the third weekly gain in the past four. Live steers in five top feedlot areas yesterday averaged $126.27, up from last week’s $124.39 average. Choice cutout values rose $1.26 to $284.29, near a three-week high reached Oct. 26. Movement totaled 130 loads. December live cattle are trading at nearly a $6 premium to the expiring October contract, which could curb near-term buyer interest unless the cash cattle and boxed beef markets show additional strength. Chart levels to watch in December futures include this week’s high at $131.925 and this week’s low at $129.20.
HOGS: Futures may extend yesterday’s sharp gains amid beliefs the market has established a near-term bottom, with wholesale pork showing renewed, if modest, strength following a prolonged slump. Pork cutout values rose 53 cents yesterday to $94.00, up from a drop near eight-month lows earlier in the week. Movement was nearly 263 loads. Cutout values need to show further strength for a sustained upside push in futures. Other cash fundamentals remain soft. The CME lean hog index is down another 97 cents today to $80.70, the lowest level since the same price on Feb. 25. December lean hogs yesterday posted the highest closing price since Oct. 20 and are up from last week’s close at $73.325. Chart levels to watch include this week’s low at $71.775 and the 10-day average around $75.10.
