GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 1 to 3 cents higher.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: Corn continues to see relative weakness and looks to challenge Wednesday’s for-the-move low. Soybeans and wheat saw modest strength, but it is unlikely these markets can continue to move in opposite directions for long. Front-month crude oil futures are finding a bid above the $100-mark as hostilities pick up in the Middle East, while the U.S. dollar index continues its methodical downtrend.
The rally in crude oil is driven by fears of a re-escalation of U.S.-Iran hostilities and threats by Tehran to widen attacks on Middle East energy infrastructure. Iran has warned publicly and via private diplomatic channels that renewed strikes by the U.S. and Israel would prompt attacks on airports, pipelines and other economic infrastructure across the Persian Gulf, the Wall Street Journal reported. The report said analysts estimate Iran has hundreds to thousands of ballistic missiles, and that U.S. and regional officials believe it has resumed production of ballistic missiles in limited numbers using stockpiled components and working in underground facilities.
Placements will likely again be the most closely watched metric, along with a quarterly breakdown of the heifer-steer ratio as traders look for signs of herd rebuilding when USDA releases its monthly Cattle on Feed Report at 2 p.m. CT. A poll by Reuters found that analysts, on average, see cattle inventories as of Oct. 1 at 11.452 million head, up 0.3% from last year. Inventory is expected to remain near-steady despite placements being expected to fall 7.4% from year-ago levels at 1.871 million. Marketings are also seen falling 7% to 1.518 million head. If realized, the average analyst estimates for both placements and marketings would be record lows for the month of September. Read Pro Farmer Economist Spencer Langford’s preview of the report here.
USDA Secretary Brooke Rollins told reporters on a conference call Thursday that the agency’s reorganization plans remain “full bore ahead” after a federal judge earlier this month granted a stay request from a coalition of federal unions that have sued to stop the effort, Agri-Pulse reported. The judge said USDA was likely “reprogramming” funds that Congress had approved for other purposes to pay for the reorganization. The Trump administration has appealed the ruling. “We believe in it more today than we ever have,” Rollins said. The plan calls for employees to move from the Washington, D.C., area to regional hubs around the country.
CORN: December corn futures look to test the for-the-move low of $4.53 1/2, which is quickly reinforced by support at $4.50. Resistance stands at $4.66 1/2, yesterday’s high, on corrective strength.
SOYBEANS: November soybeans continue to see corrective strength. Bulls are looking to topple resistance at $12.62 on a continued bounce. Support persists at the psychological $12.50 mark then the 100-day moving average at $12.41.
WHEAT: December SRW wheat is consolidating near recent lows. Bears remain in full control of the technical edge. Support stands at $6.20 while resistance stands at the overnight high of $6.31 1/2 then $6.48 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live and feeder cattle futures are expected to open with a mostly firmer tone in a continuation of yesterday’s late session strength. Bulls remain in full control of the technical advantage on the daily bar chart. Cash trade has been slow to develop this week ahead of the Cattle on Feed report. Choice beef slid another $3.12 to $369.47 Thursday, extending the recent slide.
HOGS: Lean hog futures are expected to open with a mostly weaker tone in a continuation of the ongoing downtrend. Bears remain in full control of the technical advantage as prices hit a fresh contract low on Thursday. Corrective strength could provide some of a lift after the open. The CME lean hog index is down another 67 cents to $72.15 as of Oct. 21, extending the seasonal slide. Pork cutout rose 73 cents to $75.23 amid corrective strength in bellies.