Ahead of the Open | September 14, 2023
GRAIN CALLS
Corn: 1 to 3 cents lower.
Soybeans: 1 to 3 cents higher.
Wheat: Winter wheat 4 to 6 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Action was mixed overnight in grains but corn, soybeans and wheat each saw selling pressure into the break. Export sales are unlikely to yield much support as sales came in near the lower end of expectations. Outside markets are mixed as well, with front-month crude oil futures on recent highs and nearing $90.00, while the U.S. dollar index is also seeing strength. Weather in the Midwest is expected to remain mostly dry over the next two weeks, favorable for harvesting.
India will release more wheat stocks into the open market to curb prices during the coming festive season, food secretary Sanjeev Chopra said. He said India has no immediate plans to abolish its wheat import tax or to import wheat from Russia. Chopra also assured the country possesses sufficient sugar supplies to meet festival-related demand, addressing concerns about domestic prices that have reached their highest levels in six years.
Strategie Grains increased its 2023 EU wheat production estimate by 300,000 MT to 125 MMT, though that would still be slightly below last year’s 125.3 MMT crop. The firm cut it 2023-24 EU wheat export forecast by 700,000 MT to 30.1 MMT, citing a sluggish start to the season because wheat from EU origins is proving uncompetitive against Russian wheat. EU wheat exports are now projected to fall 2.2 MMT from last year.
The House will vote today on a bill to prohibit EPA from allowing states to limit gas-powered cars. The House Rules Committee met last night to outline debate on the bill, separating it from an earlier rule that issued it alongside the stalled Defense appropriations measure. Even if it clears the House, it would not be approved in the Democrat-controlled Senate.
Russian President Putin accepted an invitation from Kim Jong Un to visit North Korea after the two held their first summit in over four years, which is believed to have focused on Pyongyang sending arms to help the Russian invasion efforts. This would mark the first time Putin has visited Kim in North Korea, the visit would indicate North Korea is crucial to the Russian war effort.
Export sales for the week ended Sep. 7:
Corn: Net sales of 753,300 MT for the 2023-24 marketing year were down 21% from the prior week and 8% from the four-week average. Increases came primarily from China, Colombia and Mexico. Traders expected net sales between 500,000 MT and 1.1 MMT.
Soybeans: Net sales of 703,900 MT for the 2023-24 marketing year were the lowest since July 20 and in the lower end of expectations. Increases came primarily from China and unknown destinations. Traders expected net sales between 600,000 MT and 1.45 MMT.
Wheat: Net sales of 437,900 MT for the 2023-24 marketing year were up 18% from the prior week and 20% from the four-week average. Increased primarily came from Mexico, Thailand and Japan. Traders expected net sales between 250,000 and 600,000 MT.
CORN: December corn futures continue to be supported by double bottom support at $4.73 1/2, though a series of lower highs continues to form on the daily bar chart. Resistance currently stands at $4.83, a testament to how tight the range is getting. Additional resistance stands at $4.86, a close above which likely leads to a test of $4.96. A break below $4.73 1/2 support bodes ill for corn bulls, leading to a likely test of $4.50.
SOYBEANS: November soybean futures saw limited buying overnight. The recent downtrend is likely to continue, with resistance coming in at $13.60 and backed by $13.69. Support can be expected at $13.44, backed by Wednesday’s low of $13.33 3/4, a close below which likely accelerates selling to the $13.00 level.
WHEAT: December SRW futures saw renewed selling pressure overnight after Wednesday’s test of 10-day moving average resistance (currently at $5.98). The recent downtrend is likely to continue with a new contract low in the coming days. Support can be expected at $5.85, backed by Tuesday’s contract low at $5.70. Resistance can be found at $5.98, backed by $6.10.
CATTLE: Mixed.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open mixed as traders await direction from the cash cattle market. Cash trade so far this week has slipped below last week’s average, though volume has been too light for a true read. Tight market ready supplies are likely to keep losses in check, but bulls need a fresh catalyst to fuel fresh buyer interest in futures. Choice beef prices fell for the third straight day, falling 48 cents to $307.55, while Select showed relative strength, rising $3.41 to $287.19. USDA reported net beef sales of 6,200 MT, down 48% from the previous week and 56% from the four-week average.
HOGS: Lean hog futures are expected to open mostly higher, though recent volatility is likely to continue to plague the market. The CME lean hog index is up 35 cents today to $86.48, marking the third daily increase in the past five. Pork cutout fell $2.98 Wednesday to $98.22, led by weakness in hams and bellies, which is likely to limit bullish enthusiasm. USDA reported net pork sales of 23,100 for 2023, down 12% from the previous week and 26% from the four-week average.
