GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 10 to 11 cents higher.
Wheat: 3 to 5 cents higher.
GENERAL COMMENTS: Soybean futures climbed overnight amid hopes for stronger exports, while corn and wheat also firmed. Malaysian palm oil futures surged to a record high and a 10.0% gain on the week. Nymex crude oil rose about 1.0%, while the U.S. dollar index weakened after another disappointing jobs report this morning.
The grain trade awaits USDA’s Oct. 12 Crop Production and Supply and Demand reports. USDA is expected to slightly lower its forecasts for the U.S. corn harvest and average yield and increase its estimates for the soybean crop.
Non-farm payrolls rose a disappointing 194,000 in September, the U.S. Labor Department reported today. Job growth fell short of expectations for a gain of about 500,000, though the unemployment rate fell to 4.8%. Weaker than expected job growth raises questions about the economy.
The French farm office reports 4% of the winter soft wheat crop had been seeded as of Oct. 4, one point behind last year at this time. Meanwhile, today’s update shows just 7% of the country’s corn crop had been harvested vs. 47% last year at this time.
Ukraine’s grain harvest is now 70% complete, with farmers having harvested 49.4 MMT, the country’s ag ministry reported. That figure includes 32.3 MMT of wheat, 9.6 MMT of barley and 4.2 MMT of corn. The ministry expects this year’s grain crop to hit record-high 80.6 MMT, a 24% jump from 2020.
CORN: December futures overnight rose as high as $5.38 3/4, slightly under last week’s close at $5.41 1/2. A three-week uptrend stalled amid pressure from the accelerating harvest. Chart levels to watch include $5.27 1/2, this week’s low, and the 50-day moving average around $5.39.
SOYBEANS: November soybeans rose as high as $12.62 1/2 overnight and are on track for the first weekly gain in the past six but prices remain in a four-month downtrend. Chart levels to watch include this week’s low at $12.31, a six-month low, and the 20-day moving average around $12.70 1/2.
WHEAT: Despite overnight gains, HRW and SRW futures are both heading for the contracts’ first weekly declines in the past four weeks, though tight global supplies should limit price downside. December SRW futures rose as high as $7.45 1/2, down from last week’s close at $7.55 1/4.
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-mixed
CATTLE: Live cattle futures are poised for a sharp gain on the week as stronger cash markets and robust exports overshadow a protracted slump in wholesale beef. Slaughter-ready steers in top feedlot areas yesterday averaged $122.96, up from an average of $122.56 last week, USDA reported. Earlier this week, the U.S. Meat Export Federation said the U.S. exported 132,577 MT of beef during August, up 21% from the same month in 2020 and the second largest monthly volume of the year. August shipments were valued at a record $1.04 billion, up 55%, the Export Federation said, citing USDA data. While exports have been strong, wholesale beef continues to drop, raising concern over domestic retail demand. Choice boxed beef fell $1.32 yesterday to an average of $285.30, the lowest since $281.00 on Aug. 2. Cattle slaughter so far this week totaled 483,000 head, up 2.1% from the same period last week and up 2.3% from the same period a year ago, USDA reported.
December live cattle yesterday rose $1.875 to $130.10, up from $125.20 at the end of last week and the highest closing price since $103.925 on Sept. 3. Yesterday’s surge negated a six-week downtrend on the daily bar chart. Chart levels to watch include the 100-day moving average around $131.00 and resistance at $133.00.
HOGS: December lean hogs rose yesterday for the first time in five sessions but are down about 3.7% from $85.175 at the end of last week. The 11.0% rally last week lost momentum as cash fundamentals weakened. Carcass cutout values fell 60 cents yesterday to an average of $112.26, down about 1.0% from $113.39 at the end of last week. Movement totaled 367 loads. National direct average carcasses rose 17 cents to an average of $70.18, while the latest CME lean hog index fell 92 cents to $92.59. Meatpackers slaughtered an estimated 1.896 million head of hogs so far this week, up 0.5% from the same period a week ago, but down 2.9% from the corresponding period in 2020.
Hog market bulls still have a near-term technical advantage. The next upside price objective for bulls is closing December futures above solid resistance at the September high of $85.675. The next downside price objective for bears is closing December below support at $77.20, which is the bottom of a big upside price gap on the daily bar chart.