Ahead of the Open | September 29, 2021

GRAIN CALLS

Corn: 2 to 3 cents higher.

Soybeans: Steady to 3 cents higher.

Wheat: 4 to 9 cents higher.

GENERAL COMMENTS: Corn, soybean and wheat futures were firmer and traded in narrow ranges overnight as traders awaited USDA’s quarterly Grain Stocks Report and Small Grains Summary tomorrow. Malaysian palm oil futures were little changed and Nymex crude oil futures were down about 0.7%. The U.S. dollar index was slightly firmer.

CHS Inc. resumed operations at its Myrtle Grove, Louisiana, grain export terminal, the company announced yesterday. The terminal was shut for the past month due to damage from Hurricane Ida. CHS said the facility is operating on generator power for now, but it expects utility power to be restored by late next week. Myrtle Grove is one of the last major grain export terminals to reopen.

Tomorrow’s USDA quarterly Grain Stocks Report is expected to show corn, soybean and wheat supplies at multiyear lows. Analysts have consistently missed the mark on pegging quarterly stocks, especially for corn, so the report may carry some surprises.

Brazil will export an estimated 4.735 MMT of soybeans this month, according to the grain exporters association ANEC. The updated forecast is down 6.1% from the association’s previous estimate. ANEC also reduced its forecast for September corn exports by 9.1%, to 2.525 MMT

Tropical Cyclone Gulab damaged India’s summer crops, including soybeans, cotton, pulses and vegetables, just before harvest. The cyclone made landfall on the country’s east coast Sunday and brought heavy rains to the southern states of Andhra Pradesh and Telangana and western states of Maharashtra and Gujarat.

The European Union exported 6.95 MMT of soft wheat so far this marketing year, up 37% from last year at this time, according to data from the European Commission.

CORN: USDA’s quarterly Grain Stocks Report is expected to show Sept. 1 corn stocks at 1.155 billion bu., which would be down 40% from last year, and the smallest Sept. 1 stocks figure since 2013. December corn overnight rose as high as $5.38, after falling 7 cents yesterday to $5.32 1/2. Further price strength could lead to tests of key upside resistance levels, such as the 100-day moving average around $5.50 1/2. Other chart levels to watch include $5.12 3/4, last week’s low and the 100-day moving average around $5.50 1/2.

SOYBEANS: U.S. soybean stockpiles as of Sept. 1 are expected to shrink to 174 million bu., based on a Reuters survey of analysts. That figure would be down 67% from the same date in 2020 and the smallest Sept. 1 soy stocks figure since 2014. November soybeans rose as high as $12.82 overnight after dropping 10 1/2 cents yesterday to $12.77, the contract’s first decline in six sessions, as the market extended a month-long consolidation. Chart levels to watch include the 40- and 200-day moving averages around $13.06 and $12.76 3/4, respectively, as well as this week’s high at $12.97.

WHEAT: USDA’s quarterly Grain Stocks Report is expected to show U.S. wheat supplies as of Sept. 1 at 1.852 billion bu., down 14% from last year and the smallest wheat stocks number for that date since 2007. December SRW wheat rose as high as $7.17 3/4 overnight in a corrective bounce from yesterday’s 2.2% drop. If the market can extend a recent upswing from the past two weeks, prices could test some key upside levels, including the 40-day moving average around $7.23 3/4 and last week’s high at $7.28 1/2. Downside levels to watch include the 100-day moving average around $7.00.

LIVESTOCK CALLS

CATTLE: Steady-weak

HOGS: Steady-firm

CATTLE: Live cattle futures face continued weakness in boxed beef prices. Slumping wholesale beef prices convey a softening retail demand picture with the summer grilling season over and expected pre-holiday purchases still weeks away. Choice cutout values fell $1.13 yesterday to an average of $301.56, the lowest price since $299.80 on Aug. 9, USDA data showed. Cash markets are poised to extend the softer tone of recent weeks, with light tests reported at $122 to $123 in Iowa, Nebraska and Kansas and $124 in Texas. Cattle slaughter so far this week was an estimated 240,000 head, down 0.4% from the same point last week but up 2.6% from the same period a year ago. December live cattle fell 30 cents yesterday to $127.50, the contract’s third consecutive daily decline.  Chart levels to watch in December live cattle include last week’s high at $129.325 and last week’s low at $126.20, as well as the 10- and 200-day moving averages around $128.20 and $127.55, respectively.

HOGS: Futures may extend this week’s rally with support from a strong wholesale market strength and expectations for tighter supplies in the wake of last Friday’s bullish USDA quarterly Hogs and Pigs Report. Open interest in lean hog futures rose 6,625 contracts yesterday, indicating new longs coming into the market. Pork cutout values fell $3.83 to an average of $108.12. The cutout average is still up 6.9% from a six-month low of $101.12 in mid-September. Carcasses on national direct markets fell $1.19 to $75.74, down 18% since the end of August. December lean hogs yesterday surged $2.025 to $83.575, the highest closing price since $84.25 on Aug. 3. Upside targets include $83.60, the intraday high for the past six weeks, and $84.375, the high for August. Downside levels to watch include the 40-day moving average around $79.40.