GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 2 to 4 cents higher.
Wheat: 2 to 4 cents lower.
GENERAL COMMENTS: Soybeans saw corrective buying overnight while grains were steady to modestly lower, led by weakness in the winter wheat markets. Strength in equity futures overnight, which surged over 1% higher, did little to spur buying interest in grains. Front-month crude oil futures are up on corrective buying this morning while the U.S. dollar index is up around 300 points.
President Trump’s administration on Sunday signaled openness to a deal with China to quell fresh trade tensions while warning that recent export controls announced by Beijing last week are a major barrier to talks. Trump wrote on social media Sunday: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” Meantime, Vice President Vance Sunday called on Beijing to “choose the path of reason” in the latest spiraling trade fight between the world’s two leading economies, claiming the U.S. has more leverage if the fight drags on. Trump on Friday announced an additional 100% tariff on China as well as export controls on “any and all critical software” beginning Nov. 1, hours after threatening to cancel an upcoming meeting with Chinese leader Xi Jinping.
China’s soybean imports hit a record high for the month of September, with the country bringing in 12.9 million MT of soybeans, according to a Bloomberg report. Chinese crushers have been bolstering supplies of the oilseed with shipments mainly from Brazil, and shunning U.S. cargoes due to high tariffs and political risks. September arrivals were also near the highest ever monthly level, which was recorded in May, and brought total imports for the first nine months of the year to 86.18 million MT, up 5.3% from a year ago, according to Bloomberg. “That ample supply gives Chinese crushers a comfortable cushion and piles even more pressure on American farmers, who are now bringing in a harvest with their top customer turning elsewhere,” said the report.
World Weather Inc. Sunday evening reported the lower and eastern U.S. Midwest, Delta and southeastern states will be drier biased through Friday. Rain is expected in each of these areas during the following full week, occurring in waves and offering some moisture to improve topsoil moisture. “Drying this week will be good for fieldwork. Rain next week will be good for winter crop emergence and establishment,” said the forecaster. U.S. hard red winter wheat areas will experience an alternating pattern of rain and sunshine during the next two weeks, supporting wheat planting, emergence and establishment. Summer crop harvesting will advance around the precipitation. The U.S. northern Plains and upper Midwest will not receive much precipitation early this week, although some timely rain is likely late this week and next week.
CORN: December corn is trading near last week’s low. Support stems from $4.10 on continued selling pressure. Resistance comes in at $4.15 then the 10-day moving average at $4.18.
SOYBEANS: November soybeans saw corrective buying overnight. Bulls are targeting resistance at $10.16 3/4 on a bounce, while support comes in at Friday’s low of $10.02 1/4 on a reversal lower.
WHEAT: December SRW wheat is trading near contract lows. Bulls are looking to hold support at $4.90 on persistent selling. Resistance stands at the psychological $5.00 mark then $5.06 3/4, the 10-day moving average.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Cattle futures are expected to open higher in a continuation of recent strength, though overbought conditions could limit gains after the open. Even amid heavy selling in grains Friday, cattle futures closed higher. The strength in futures likely spurred late week cash market strength, though last week’s average will not be released until later this morning. Wholesale beef ended Friday higher with choice climbing 35 cents to $365.57 while select rose $2.06 to $346.39.
HOGS: Lean hog futures are expected to open with a mostly weaker tone in a continuation of recent selling pressure, though technically oversold conditions could limit selling pressure after the open. The CME lean hog index continues to fall under seasonal pressure, down another 65 cent to $99.43 as of Oct. 9. Pork cutout climbed $1.78 Friday as all cuts except bellies posted gains on the day.