Ahead of the Open | September 22, 2022
GRAIN CALLS
Corn: Steady to 1 cent higher.
Soybeans: 1 to 2 cents higher.
Wheat: Winter wheat 5 to 8 cents lower; spring wheat 1 to 3 cents lower.
GENERAL COMMENTS: Corn and soybean futures ended overnight trading slightly firmer while winter wheat fell from Wednesday’ rally to 2 1/2-month highs as traders continued to closely watch the Ukraine conflict. Malaysian palm oil futures fell 1.5%, while front-month crude oil rose nearly $2. U.S. stock index futures signal a mixed open and the U.S. dollar index is up slightly after earlier jumping to a fresh 20-year high.
USDA reported daily corn sales of 105,000 MT for delivery to Mexico and 101,600 MT to “unknown destinations,” both during the 2022-23 marketing year.
President Joe Biden warned world leaders Wednesday that a nuclear war “cannot be won and must never be fought,” as he accused Russia and its leader Vladimir Putin of violating the United Nations international charter in its “brutal, needless war” against Ukraine. Biden also stressed the U.S. “does not seek conflict” or a “Cold War” with China. His comments came after Putin earlier this week ordered Russia’s first mobilization since World War II and warned the U.S. and its western allies he would be prepared to use nuclear weapons to defend Russia.
Frost and freezes occurred across parts of the north-central U.S. Plains overnight, ending the growing season with a few extreme lows dipping into the upper 20s Fahrenheit, World Weather Inc. said. “The impact of the cold should not be too great, but some of the crops in the region were not fully mature,” the forecaster said.
The Rosario Grain Exchange cut its Argentine wheat crop estimate by 1.2 MMT to 16.5 MMT after drought reduced yield potential. The exchange now forecasts the country’s 2022-23 corn production at 56 MMT, down 2 MMT from the previous outlook as drought has delayed planting of the crop. The exchange raised its soybean crop forecast by 1 MMT to 48 MMT as it now expects 200,000 hectares originally intended for corn to be switched to soybeans.
India’s government is mulling requests from exporters to allow shipment of some rice cargoes that have been stuck at ports since the country barred exports of broken rice earlier this month, Reuters reported. India banned broken rice exports and applied a 25% duty on various other types. The requests are for shipments of 100% broken rice and the export of other white rice stocks at ports without paying the export tax, the report said, noting there are at least 20 ships waiting to load some 600,000 MT of rice with another 400,000 MT stuck at port warehouses and container freight stations.
President Biden announced $2.9 billion in fresh U.S. government assistance to address global food insecurity during his speech Wednesday to the United Nations General Assembly. The new funds are a response to growing concerns about hunger worldwide due to rising food, fertilizer and energy prices caused in part by Russia’s war in Ukraine, according to the White House.
Malaysia’s palm oil stocks could rise to a 3-1/2-year high by the end of 2022 as exports are likely to take a hit from rival Indonesia waiving export levies to bring down stockpiles, a senior government official told Reuters. Indonesian producers are moving to lighten their stocks at cheaper prices after Jakarta recently extended its export levy waiver to Oct. 31 in a reversal of course from an export ban in May that had shut them out of global trade.
CORN: USDA reported net U.S. corn sales of 182,300 MT for the week ended Sept. 15, down sharply from 583,100 MT the previous week and well below trade expectations for 400,000 to 850,000 MT. Exports totaled 563,000 MT, primarily to Mexico (259,000 MT), China (142,300 MT) and Japan (137,000 MT).
WHEAT: Net weekly wheat sales totaled 183,500 MT for 2022-23, including China (134,300 MT, including 130,000 MT switched from unknown destinations and decreases of 1,500 MT). Sales were down from 217,300 MT the previous week and fell short of expectations ranging from 200,000 to 500,000 MT.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
USDA reported net weekly U.S. beef sales of 15,200 MT for 2022, primarily for China (6,200 MT, including decreases of 200 MT) and Japan (3,200 MT, including decreases of 500 MT). October live cattle fell 42.5 cents Wednesday to $145.875.
HOGS: Lean hog futures may see followthrough pressure from Wednesday’s weak close and slumping wholesale pork prices. Pork cutout values fell $4.60 Wednesday to a four-month low of $100.35, driven by a plunge of more than $19 in bellies. The cutout appears poised to drop below $100.00 for the first time since May 12 as packers are cutting prices to keep product moving through the pipeline amid reduced retailer interest. The CME lean hog index is down 40 cents to $97.96 (as of Sept. 20). USDA reported net weekly pork sales of 29,000 MT for 2022, primarily for Mexico (15,500 MT, including decreases of 600 MT). October lean hogs fell $1.55 Wednesday to $94.425, while December hogs fell $1.725 to $86.45.
USDA will detail frozen meat stocks at the end of August in this afternoon’s Cold Storage Report. The five-year average is a 20.1-million-lb. increase in beef stocks and a 12.3-million-lb. rise in pork stocks during the month.
