GRAIN CALLS
Corn: 2 to 4 cents higher.
Soybeans: 11 to 13 cents higher.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Soybeans continue to lead strength, posting impressive gains overnight and are working higher for the third consecutive session. If soybeans can pull corn and wheat higher, that would be a sign that lows could be in place despite yesterday’s data release from USDA that indicates robust supply in corn. Front-month crude oil futures are around steady while the U.S. dollar index is down around 250 points.
More Wall Street firms are forecasting the Federal Reserve will begin cutting U.S. interest rates in September as the labor market weakens and inflation remains relatively tame. The Fed will likely lower the main interest rate by 25 basis points at the September FOMC meeting, followed by two more cuts in December and March, Nomura economists forecast. Markets are also pricing in Fed rate cuts, indicating a September cut and positioning for another reduction in December. U.S. consumer price data Tuesday showed the core reading (minus food and energy) increased 3.1% in July, year-on-year, which was just above market expectations but not considered problematic.
U.S. Treasury Secretary Scott Bessent said Tuesday that U.S. trade officials will reconvene with their Chinese counterparts within two to three months to discuss the future of bilateral trade between the world’s two largest economies. His comments followed this week’s extension of a 90-day tariff truce between the two nations, which temporarily averts more duties on each other’s goods. Bessent also said the U.S. would require “months, if not quarters, if not a year” of sustained progress in curbing fentanyl flows from China before considering any tariff reductions.
Global oil markets are on track for a record crude oil supply surplus next year as demand growth slows and supplies rise, the International Energy Agency reported today. Oil inventories will accumulate at a rate of 2.96 million barrels a day, surpassing even the average buildup during the pandemic year of 2020, data from the IEA’s monthly report showed. The IEA said “Oil-market balances look ever more bloated as forecast supply far eclipses demand towards year-end and in 2026,” and said “It is clear that something will have to give for the market to balance.”
CORN: December corn futures saw modest profit-taking overnight. Resistance comes in at the psychological $4.00 mark on continued strength. Support lies at yesterday’s contract low of $3.92.
SOYBEANS: November soybean futures saw impressive strength again overnight. Bulls are looking to topple psychological $10.50 on persistent strength, which is a sales target for us. Support comes in at $10.37 then $10.25 on profit taking.
WHEAT: December SRW futures saw modest profit taking overnight. Bulls are looking to topple resistance at $5.35 on persistent strength while support comes in at the psychological $5.25 mark on resurgent selling pressure.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle and feeders are expected to open higher in a continuation of yesterday’s strength. Cash cattle trade has yet to initiate this week, but cash trade is expected to be steady at worst. Wholesale beef ended Monday sharply higher, a sign that packers could be actively attempting to manage margins that remain deep in the red. Choice cutout surged $9.06 to $390.58 on Tuesday while Select jumped $6.03 to $365.64.
HOGS: Lean hog futures are expected to open with a mostly weaker tone. Gains in the cattle complex could limit selling pressure after the open. The CME lean hog index is down another 18 cents at $109.84 as of Aug. 11. Pork cutout plunged $4,39 to $114.70 on Tuesday, as losses in all cuts except ribs weighed on prices. Choppy action in the cash market has led to somewhat volatile action in futures over the past week.