GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 2 to 5 cents higher.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Soybeans saw relative strength overnight while corn and wheat saw action on either side of unchanged. Buying interest picked up going into the break in grains. The U.S. dollar index looks to have posted a major trend reversal as it is working higher. The index is currently up around 200 points. Front-month crude oil futures are modestly higher as well, building on recent corrective strength.
Most federal government shutdowns last only hours or a few days. The current lapse is now the fourth-longest in modern history. One sign the government shutdown may not last much longer is U.S. air travel delays. Reports said the last government shutdown in late 2018-early 2019 was ended by air travel delays. Apparently, U.S. lawmakers on both sides of the aisle get spooked by angry U.S. travelers/voters. Bloomberg reported air traffic into and out of Chicago and Dallas was plagued by delays Tuesday night due to staffing shortages caused by the government shutdown, according to advisories from the Federal Aviation Administration. Delays at Dallas Fort Worth International Airport, a main hub for American Airlines Group Inc., reached an average of 30 minutes Tuesday. With the shutdown now a week old, air traffic controllers and other essential staff are still working — even though they won’t be paid until the impasse between Democrats and Republicans ends, and a resolution is reached.
Stretched valuations for artificial intelligence companies and challenges to the Federal Reserve’s independence have fueled the risks of a “sharp market correction,” the Bank of England said today, in its strongest warnings yet. In its quarterly financial stability update, the U.K. central bank said asset valuations have continued to rise and credit spreads tighten since its June review, despite “persistent material uncertainty around the global macroeconomic outlook.” Equity market valuations appear “stretched” with “technology companies focused on AI” particularly vulnerable, especially if “expectations around the impact of AI become less optimistic,” officials said, according to minutes of the Financial Policy Committee meeting held on Oct. 2 and reported by Bloomberg. The latest BOE report follows similar comments from other notables, including famed trader Paul Tudor Jones, who this week said the U.S. stock market may be entering a blow-off top phase.
The USDX has rallied sharply the past three weeks, hitting a nine-week high today, while the Euro currency sunk to a two-month low today, mostly due to a French political crisis that has the European Union and European markets on edge. Outgoing French Prime Minister Sebastien Lecornu has expressed optimism that an accord can be reached to allow the formation of a new government without fully endorsing a new proposal to rethink a controversial pension law, Bloomberg reported. Former French prime minister Elisabeth Borne said she was open to a suspension of the pension law if it meant bringing stability to the country, which would be a major concession to the Socialist Party. Lecornu noted that the goal of getting a budget by the end of the year “distances the prospect of a dissolution” of the National Assembly and “requires that everyone have the capacity to move forward”. The greenback got an additional boost today as the New Zealand dollar tumbled to a six-month low after its central bank delivered a larger-than-expected interest-rate cut and signaled a willingness to ease its monetary policy further.
CORN: December corn continues to pivot near $4.20. Resistance stands at $4.24 1/4, the 100-day moving average, while bulls are seeking to hold support at Monday’s low of $4.17 1/4.
SOYBEANS: November soybeans continue to slowly grind higher. Resistance stands at $10.27, the 100-day moving average, which capped the upside overnight. Additional strength targets resistance at $10.35 1/2. Support stands at $10.20 on a push lower.
WHEAT: December SRW wheat are trading near recent lows. Prices went into the break off session lows but still continue trade near yesterday’s contract low close. Support stems from $5.05 while bulls are eyeing resistance at $5.13.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Cattle futures are expected to open higher in a continuation of recent strength. After breaking out of the sideways consolidation pattern, bulls are likely to build on recent momentum. Cash cattle trade remains light to start the week as feedlots are holding out for higher bids amid the surge in futures. Wholesale beef continues to bounce, with Choice rising $2.63 to $365.97 Tuesday while Select climbed 91 cents to $348.88.
HOGS: Lean hogs are expected to open with a mostly firmer tone as futures are support by technical levels just under the market. December lean hogs continue to consolidate in an apparent bear flag on the daily bar chart. A breakout of the sideways range would accelerate selling efforts. The CME lean hog index is down another 60 cents to $101.42 as of Oct. 6. Pork cutout slid $1.32 to $106.03 Tuesday, led by losses in bellies.