Ahead of the Open | September 15, 2022

GRAIN CALLS

Corn: 1 to 3 cents higher.

Soybeans: Steady to 1 cent higher.

Wheat: HRW and SRW 2 to 7 cents lower, spring wheat 1 to 8 cents higher.

GENERAL COMMENTS:  Corn and soybean futures modestly firmed toward the end of a two-sided overnight session as traders waited for the resumption of weekly USDA export sales data. Winter wheat futures faded to losses after posting fresh two-month highs. Malaysian palm oil futures fell 2.9%, while front-month crude oil futures are down more than $1. U.S. stock index futures signal a weaker open and the U.S. dollar index is down around 150 points.

Major U.S. railroads and unions representing 115,000 of their workers reached tentative agreement giving them better pay and improved working conditions, President Joe Biden said in a statement Thursday. A Labor Department official confirmed a deal “that balances the needs of workers, businesses, and our nation’s economy” was reached in the early hours of the morning on Thursday after 20 consecutive hours of negotiations between rail companies and union negotiators.

USDA released four weeks of export sales data at 7:30 a.m. CT, with the weeks ended Aug. 18 and Aug. 25 combined in a single report, while separate reports were issued for the weeks ended Sept. 1 and Sept. 8. USDA had not published its weekly export reports since a technical glitch Aug. 25.

Analysts expect members of the National Oilseed Processors Association (NOPA) to report August soybean crush totaled 166.1 million bu., which would be down 2.4% from July but up 4.6% from last year and the second highest August figure behind 2019. Soyoil stocks are expected to decline to a 13-month low of 1.658 billion pounds.

Pakistan’s wheat production could be a lot lower than most, including USDA, are projecting, according to several sources. Aid agencies and officials warn that Pakistan’s cataclysmic floods could spread waterborne diseases and increase food shortages, further straining a population already reeling from climate disaster and record inflation. Months of flooding have inundated Pakistan, submerging one third of its territory and transforming once-populated lands into shrinking islands.

Strategie Grains raised its outlook for the 2022-23 EU wheat crop by 800,000 MT to 124.1 MMT, though that would still be 4.4% lower than the previous year. However, it cut the EU wheat export outlook by 300,000 MT to 28.7 MMT. That would be virtually in line with 2021-22 shipments.

Kazakhstan’s ag ministry lifted restrictions on exports of wheat and flour as of Sept. 14. Exporters are now freely allowed to sell wheat and flour onto the world market. Previous quotas were originally expected to run through Sept. 30.

Indonesia set its crude palm oil reference price for Sept. 16-30 at $846.32 per MT, down from $929.66 for the first half of the month. The new reference price would place the export tax at $52 per MT, down from the current $74 rate. Separately, the Indonesian Palm Oil Association (GAPKI) said the country exported 2.71 MMT of palm oil in July, including refined products such as biodiesel and oleochemical, down 1.3% annually but firmer on a monthly basis.

Japan purchased 97,373 MT of wheat from its weekly tender, including 31,120 MT U.S. and 66,253 MT Canadian. Saudi Arabia tendered to buy 535,000 MT of wheat.

CORN: USDA reported net U.S. corn sales during the week ended Sept. 8 totaling 583,100 MT for 2022-23, primarily for Mexico (283,800 MT, including decreases of 3,500 MT), Guatemala (135,000 MT, including decreases of 800 MT) and “unknown destinations” (90,700 MT). Sales were within analyst expectations ranging from 300,000 to 900,000 MT.

SOYBEANS: Net weekly soybean sales totaled 843,000 MT for 2022-23, primarily for China (441,700 MT), unknown destinations (107,400 MT) and Taiwan (104,200 MT). Sales were at the high end of expectations ranging from 300,000 MT to 1.0 MMT.

WHEAT: Net weekly wheat sales totaled 217,300 MT for 2022-23, primarily for Iraq (100,000 MT), Mexico (78,300 MT) and China (64,700 MT). Sales were at the low end of expectations ranging from 200,000 to 550,000 MT. December SRW wheat overnight reached $8.84 3/4, the highest intraday price since $8.85 1/4 on July 12, before dropping to losses.

LIVESTOCK CALLS

CATTLE: Steady-weaker

HOGS: Steady-weaker

CATTLE: Live cattle futures may face pressure from weakness in cash and wholesale beef markets. So far this week, only light cash trade has occurred at steady to $1 lower prices in the northern market. Cash sources signal packers are short-bought on slaughter needs but have been hesitant to get aggressive with bids amid the railroad uncertainty. Choice boxed beef fell $3.19 Wednesday to $253.47, the lowest daily average since March 9, but movement was strong at 210 loads, signaling stepped-up retail demand on price weakness. October live cattle fell 45 cents Wednesday to $144.35. October feeders rose 90 cents to $181.425.

USDA reported net weekly U.S. beef sales of 15,100 MT for 2022, primarily for South Korea (6,700 MT, including decreases of 1,200 MT) and Japan (4,200 MT, including decreases of 300 MT).

HOGS: Lean hog futures may face pressure from a continuing cash market slide. The CME lean hog index is down another 9 cents to $97.58 (as of Sept. 13), a seven-month low, though that’s the smallest daily decline in weeks. The cash index is $2.88 above October futures’ close Wednesday, down from $14.735 at the end of August. Pork cutout values rose $2.11 Wednesday to $106.88, but movement slowed to 269 loads. October lean hogs fell $1.05 Wednesday to $94.70, down from a four-week-high close Tuesday.

USDA reported net weekly U.S. pork sales of 25,100 MT for 2022, primarily for Mexico (9,900 MT, including decreases of 200 MT), China (4,700 MT, including decreases of 100 MT) and Japan (4,700 MT).