Ahead of the Open | September 19, 2022

GRAIN CALLS

Corn: 4 to 5 cents lower.

Soybeans: 3 to 5 cents lower.

Wheat: 15 to 22 cents lower.

GENERAL COMMENTS: Winter wheat futures fell sharply overnight and corn and soybeans also dropped amid pressure from strength in the U.S. dollar and escalating concerns over global recession. Malaysian palm oil futures fell 2.2% as expectations for higher production outweighed strong demand. Front-month crude oil futures are down more than $2 after dropping to the lowest levels in over a week. U.S. stock index futures signal a weaker open and the U.S. dollar index is around 200 points higher.

USDA reported a daily soybean sale of 136,000 MT for delivery to China during the 2022-23 marketing year.

The U.S. dollar is experiencing a once-in-a-generation rally, a surge that threatens to exacerbate a slowdown in growth and amplify inflation headaches for global central banks. The dollar’s role as the primary currency used in global trade and finance means its fluctuations have widespread impacts. In a worrying sign, attempts from policy makers in China, Japan and Europe to defend their currencies are largely failing in the face of the dollar’s unrelenting rise, the Wall Street Journal reports.

The central U.S. will experience hot, dry weather through the middle of this week, followed by cooler air and some showers late this week. U.S. rainfall will be limited over the next 10 days, which should facilitate rapid early harvest progress. In South America, needed rains fell on areas of Brazil and Argentina over the weekend. Argentina will receive some additional rains early this week before drier conditions return, while three waves of rains are expected across Brazil over the next 10 days.

Through Saturday, a total of 165 ships with 3.7 MMT of agricultural products on board had left Ukrainian ports since Aug. 1 under the grain export deal, the country’s infrastructure ministry said. Another 10 ships carrying 169,300 MT of grain departed Ukrainian ports on Sunday.

Ukraine expects a 2022 grain crop of 50 MMT to 52 MMT, unchanged from its previous estimate and down from 86 MMT last year, the country’s ag ministry said on Monday. The ministry expects grain exports to total between 5.4 MMT and 5.5 MMT this month, up from 4.5 MMT in August.

Russian ag consultancy IKAR raised its forecast for Russia’s 2022 wheat crop by 2 MMT to 99 MMT. IKAR says Russia will have 47.5 MMT of wheat available for export in 2022-23.

Large speculators expanded bullish bets in the corn and soybean markets to the highest levels in nearly three months, based on data from the Commodity Futures Trading Commission. The managed money net long in corn futures and options rose 14,164 contracts during the week ended Sept. 13 to 240,643 contracts, the highest net long since the week ended June 21, according to the CFTC’s Commitment of Traders data. In soybeans, the managed money net long rose 12,498 futures and options contracts to 112,127 contracts, the highest since the week ended June 28.

Saudi Arabia purchased 556,000 MT of wheat from unspecified origins. Pakistan tendered to buy 300,000 MT of wheat from unspecified origins. Bangladesh cancelled a tender to buy 50,000 MT of wheat.

CORN: December corn futures fell as low as $6.71 overnight, the fifth straight daily decline, after ending last week at $6.77 1/4, down 7 3/4 cents for the week. In addition to concerns with the global economy, the expanding U.S. harvest may also pressure prices. USDA will update harvest progress after today’s close. Last week, USDA said 5% of the crop was harvested as of Sept. 11, slightly above the 4% average for the previous five years.

SOYBEANS: November soybeans overnight fell as low as $14.43, the fifth straight daily decline, after ending last week at $14.48 1/2, up 36 1/4 cents for the week. Mostly favorable conditions for crop maturation and early harvesting may weigh on the market, but USDA’s lower-than-expected production and ending stocks forecasts released a week ago remain a longer-term supportive element.

WHEAT: December SRW wheat overnight fell as low as $8.36 1/4, near last week’s low of $8.30 3/4. The contract ended last week at $8.59 3/4, down 9 3/4 cents for the week. USDA will update weekly planting progress after today’s close. Last week, USDA said 10% of the winter wheat crop was planted as of Sept. 11, ahead of the 7% average for the previous five years.

LIVESTOCK CALLS

CATTLE: Steady-mixed

HOGS: Steady-firmer

CATTLE: Live cattle may start the week on a mixed note, with expectations for further cash market strength potentially offset by slumping wholesale beef. USDA-reported live steers averaged $142.79 through Friday morning, up from the previous week's average of $142.48. Traders expect cash prices to continue firming this week but buyer interest in futures may be limited until active trade gets underway, which probably won’t happen until midweek or later. Choice beef cutout values ended last week at $252.40, down $4.86 for the week and near a 17-month low posted Thursday. October live cattle ended last week at $145.50, down 17.5 cents for the week.

HOGS: Lean hog futures may extend last week’s gains behind a continuing rebound in cash fundamentals. The CME lean hog index is 20 cents higher to $97.97 (as of Sept. 15), the second straight daily gain after a five-week string of losses. October lean hog futures finished Friday around $1 below today’s cash index quote, which should limit seller interest and may encourage followthrough buying in the lead contract after a strong technical performance that resulted in a weekly high close Friday. Pork cutout values ended last week at $106.39, up $3.52 for the week and the highest daily average in over three weeks. October lean hogs ended last week at $96.90, up $3.725 for the week and a four-week closing high.