Ahead of the Open | September 29, 2022

GRAIN CALLS

Corn: 1 to 3 cents higher.

Soybeans: 5 to 9 cents higher.

Wheat: HRW and SRW 1-3 cents higher, spring wheat 3-5 cents lower.

GENERAL COMMENTS: Wheat futures extended early-week gains overnight and reached highs for the week as concerns over supply disruptions overshadowed U.S. dollar strength. Corn and soybeans also firmed overnight. Malaysian palm oil rose 3.6% after tumbling to a 20-month low the previous session. Front-month crude oil rose slightly. U.S. stock index futures signal a weaker open and the U.S. dollar index is up more than 500 points and near 20-year highs set earlier this week.

Hurricane Ian brought horrific winds and flooding rains to southwestern and central Florida Wednesday causing catastrophic damage before weakening into a tropical storm that was moving off the east-central Florida coast this morning. The storm will make another landfall in South Carolina Friday afternoon until then will produce tropical storm force wind from northeastern Florida to the Carolinas while rain continues in coastal areas in the same region. In the Midwest, frost and light freezes occurred this morning in the northern U.S. Great Lakes region without much expected impact on agriculture, according to World Weather Inc.

Russian President Vladimir Putin will host a signing ceremony at the Kremlin on Friday to incorporate four Ukrainian regions into Russia, a major step towards formally annexing around 15% of Ukraine. Putin will give a speech and meet with the leaders of the self-styled Russian-backed Donetsk People’s Republic and Luhansk People’s Republic as well as the Russian-installed leaders of the parts of the Kherson and Zaporizhzhia regions that Russian forces occupy.

Analysts expect USDA’s Hogs & Pigs Report this afternoon to show the U.S. hog herd contracted 0.8% from year-ago, which would place the Sept. 1 inventory at around 74.3 million head. The market hog inventory is expected to be 0.9% smaller and the breeding herd 0.4% smaller than year-ago – both would be the lowest levels since 2017. The pre-report expectations also signal summer farrowings declined 0.8% and fall farrowing intensions will be down 1.0% from last year, though winter intensions are expected to be up 0.5%.

Taiwan purchased 51,800 MT of U.S. milling wheat. Japan purchased 61,800 MT of milling wheat in its weekly tender, including 28,550 MT U.S. and 33,250 MT Canadian. South Korea bought 65,000 MT of corn expected to be sourced from South America. Iraq tendered to buy a nominal 50,000 MT of milling wheat from unspecified origins.

CORN: USDA reported net U.S. corn sales of 512,000 MT for the week ended Sept. 22, primarily for Mexico (321,700 MT, including decreases of 1,800 MT). Sales were within trade expectations ranging from 250,000 to 800,000 MT.

SOYBEANS: Net weekly U.S. soybean sales totaled 1.003 MMT, primarily for China (548,700 MT, including 132,000 MT switched from “unknown destinations” and decreases of 32,000 MT). Sales topped expectations ranging from 250,000 to 850,000 MT.

WHEAT: Net weekly wheat sales totaled 279,800 MT, primarily for Guatemala (115,400 MT, including 51,500 MT switched from unknown destinations). Sales were at the low end of expectations ranging from 175,000 to 500,000 MT. December SRW wheat overnight reached $9.14 1/2, a high for the week.

LIVESTOCK CALLS

CATTLE: Steady-weaker

HOGS: Steady-weaker

CATTLE: Live cattle futures may extend Wednesday’s drop to two-month lows on expectations futures weakness will burden the cash market. Some light cash cattle trade was reported Wednesday at roughly steady prices in the Southern Plains, though most feedlots held out for hopes of firmer prices despite this week’s pressure on live cattle futures. Cash negotiations remained quiet in the northern market. Unless packers are shorter on near-term needs than cash sources expect or futures stage a strong recovery rally, it appears unlikely cash cattle prices would firm this week. Choice beef cutout values fell 88 cents Wednesday to $247.44, an eight-month low. Movement was a strong 165 loads. December live cattle fell 62.5 cents to $146.275, the contract’s lowest close since July 18.

USDA reported net weekly U.S. sales of 21,500 MT for 2022, were primarily for South Korea (7,300 MT, including decreases of 400 MT), China (6,000 MT, including decreases of 100 MT) and Japan (3,500 MT).

HOGS: Lean hog futures may remain under pressure from this week’s tumble to nine-month lows as charts and cash fundamentals erode. The CME lean hog index fell 58 cents to $96.41, its fifth drop in the last six days. Pork cutout values firmed $1.76 Wednesday to $100.77. While movement slowed to 275.8 loads yesterday, there apparently was enough value buying under $100.00 on Tuesday’s drop below that level to encourage packers to raise bids. The question now is whether there’s enough retailer demand for packers to keep raising prices. December hog futures fell 42.5 cents Wednesday to $75.825, the contract’s lowest closing price since December 20.

USDA today reported net weekly pork sales totaling 34,300 MT, primarily for Mexico (23,700 MT, including decreases of 200 MT), South Korea (2,900 MT, including decreases of 800 MT) and China.