Ahead of the Open | October 3, 2022
GRAIN CALLS
Corn: 8 to 9 cents higher.
Soybeans: 2 to 4 cents higher.
Wheat: 10 to 15 cents higher.
GENERAL COMMENTS: Wheat futures rose near three-month highs overnight as the market extended Friday’s rally triggered by USDA’s unexpectedly low U.S. crop estimate. Corn and soybeans also rose amid heightened Russia tensions. Malaysian palm oil futures rose 0.4%, a third straight daily gain after plunging 18% in September. Front-month crude oil futures are nearly $4 higher on reports OPEC+ is considering an output cut. U.S. stock index futures signal a firmer open and the U.S. dollar index is up about 150 points.
USDA reported daily soybean sales totaling 110,000 MT to unknown destinations for 2022-23.
U.S. HRW areas in the central and southwestern Plains may receive some rain over the next 10 days, “but this should not be the start of a trend change,” World Weather Inc. said today. “Some moisture will occur, though, to help wheat planting, emergence and establishment.” The lower U.S. Midwest, Delta and southeastern states will be dry biased for the next week to 10 days
Russia may start providing trade finance to importers of its grain as sanctions imposed on Moscow since it sent troops to Ukraine affect this financial instrument, Agriculture Minister Dmitry Patrushev said. Russia is working with Eximbank and the Russian agency for export credit and investment insurance “to provide financing to foreign companies for the purchase of our products,” Patrushev told the RBC business daily. “This will give us the opportunity to sell large amounts. Because there is also a problem with settlements so far,” he added. Some importers of Russian grain are currently paying in rubles or their local currency, and the number of such deals is rising every month, Patrushev said.
Natural gas has finally stopped leaking from the Nord Stream 1 and 2 pipelines after several ruptures were discovered in the lines last week, the Danish Energy Agency said Sunday. Although a cause has not been formally identified, political leaders in Europe and the U.S. suggested the explosions that caused the ruptures were an act of sabotage, with speculation about responsibility focusing on Russia.
Traders expect USDA to report August soybean crush totaled 175.6 million bu., based on a Bloomberg survey, which would be down 5.7 million bu. (3.1%) from July but up 7.3 million bu. (4.3%) versus last year. Traders expect corn-for-ethanol production to fall 12.9 million bu. (2.9%) from July but be up 16.0 million bu. (3.8%) compared with August 2021.
Heavy rainfall in October could threaten India’s crops. India is likely to receive above-average rainfall in October, an official with the state-run weather office said last Friday, posing risks for some crops. Monthly rainfall is expected at 115% of the long-term average, Mrutyunjay Mohapatra, director general of the India Meteorological Department, said. Heavy rains in October could damage ripening crops such as rice, pulses, cotton and soybeans, and may delay wheat planting in parts of India.
Strategie Grains raised its forecasts for this year’s rapeseed crop in the European Union, citing better than expected harvests. The consultancy estimated the 2022 EU rapeseed crop at 19.46 MMT, up 310,000 MT from last month and now 14.5% above 2021. The consultancy increased its EU sunflower seed crop forecast to 9.25 MMT, up 80,000 MT from last month but still 10% below last year.
CORN: December corn futures traded within Friday’s range overnight after ending last week at $6.77 1/2, the contract’s highest close since Sept. 22 and a gain of 3/4 cent for the week. Prices may gain support early this week from USDA’s lower-than-expected Sept. 1 stocks figure in its quarterly Grain Stocks report Friday. USDA reports weekly harvest progress after today’s close. As of Sept. 15, the U.S. corn harvest was 12% complete, up from 5% from a week earlier but slightly under trade expectations for 13%.
WHEAT: December SRW wheat overnight reached $9.38 3/4, under the near three-month high of $9.45 3/4 posted Friday. The contract ended last week at $9.21 1/2, up 41 cents for the week and the contract’s highest closing price since June 29. A week ago, USDA said the U.S. winter wheat crop was 31% planted as of Sept. 25, up from 21% a week earlier and slightly ahead of the 30% five-year average.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weaker
HOGS: Lean hog futures may face pressure as weakness in cash fundamentals and economic concerns overshadow bullish USDA Hogs & Pigs Report data. The CME lean hog index is down 23 cents to $94.91, the lowest since mid-February. USDA, in its quarterly Hogs & Pigs update Thursday, estimated the U.S. hog herd at 73.8 million head as of Sept. 1, down 1.4% from a year earlier and more than expectations for a 0.8% drop. Wholesale pork extended a slump, with pork cutout values down $1.21 Friday to $97.59, the lowest daily average since Feb. 8. December lean hogs rose 50 cents Friday to $76.225, still down $6.575 on the week.
