CORN
Corn futures were lower overnight with December corn down 3 cents to 5.13-1/4. Friday’s USDA numbers helped the contract forge a low of 4.97-1/2 before closing back above 5.00 and the 200-day moving average support at 5.05-1/2 on good buying interest at the new multi-month lows. This suggests a near-term low for the market to build support around. Dec 2022 corn is down a penny this morning to 5.00-1/4. Weekly Export Inspection and Crop Progress data will be out today as seasonal harvest chatter filters into the market. Meanwhile, USDA’s uptick in row crop production on Friday and subsequent bullish reversals could signal that the seasonal lows are taking place as U.S. fall harvest gets underway.
SOYBEANS
The soybean complex was mixed overnight. Nov beans are down 2 to 12.84-1/2 this morning. Dec meal is down 1.50 per ton to 341; And Dec bean oil is up 14 cents to 56.13. Nov beans are struggling to stay above 200-day moving average support which was noticeably tested following Friday’s release of the September USDA report. That line is drawn at 12.62-1/2. With growing production estimates and prices bound by a persistent consolidation phase, we view the market poised for more choppy to lower movement to begin the week, barring any strong export sales announcements. Chinese Jan bean futures were up 44 yuan; Soymeal up 50; Soyoil down 52; Palm oil down 90; Malaysian palm oil prices overnight were up 32 ringgit (+0.75%) at 4310 on anticipation of rising demand from the biggest buyer India after the country announced lower import duties for vegetable oils. Basis bids for soybeans shipped by barge to the U.S. Gulf Coast rose for a second straight day on Friday on improving demand, as grain exporters continued to recover from shutdowns in the wake of Hurricane Ida, traders said.
WHEAT
Wheat futures were mixed overnight with Dec Chicago down 3 to 6.85-1/2, KC down 2 to 6.80-1/2. Spot basis bids for HRW wheat held steady on Friday in the southern U.S. Plains and farmer selling was quiet following a 5.6% decline in K.C. wheat futures last week, according to grain dealers. MPLS Dec wheat is down 4 this morning to 8.73-3/4. All three contracts are mid-range of Friday’s lower trading ranges while consolidating a breakout to the downside on daily price charts. Dec Chicago faces 200-day moving average support down near 6.69. Dec KC wheat his bouncing off 100-Day MA support at 6.76 with the contract’s 200-day situated down at 6.47. Stronger-than-expected world ending stocks combined with a strengthening dollar will keep wheat under pressure to begin the week.
CATTLE
The cattle futures complex is called steady to lower amid a weak technical picture and search for a fall low. Selling pressure highlighted the end of last week, as prices finished with moderate losses. October cattle held support and consolidated on the 200-Day moving average for the third consecutive day, but the overall market is on a slippery slope, as the premium in the deferred months will keep the pressure on the market. A market that is bear spread, with the weakness in the front versus the back is a seller’s market, and cattle are reflecting that type of market. Light to moderate trade cash trade occurred last week with the North at $124 to $127 live, and a range of $197 to $203 dressed, with most being about $200 – mostly steady to $2 softer than last week. Light volumes were traded in the South at mainly $123 to $124 – steady relative to the prior week. The trend in cutout vales were softer last week with the Choice cutout ended the week $5.34 softer, and Selects decreased $8.52/cwt. While the decrease was relatively small, it was still disappointing with reduced production last week due to the holiday. Estimated slaughter totaled 121,000 head, 7,000 greater than last week, and 2,000 more than a year ago. Saturday’s kill was estimated at 91,000 head, bringing the weekly total to 577,000 head, 50,000 less than the prior week, and 4,000 below 2020, as totals were influence by Labor Day activity.
HOGS
Hogs are called steady to lower. Hogs saw strong selling pressure to end the week as prices broke through support levels, and were subject to technical selling and long liquidation. Closing National Direct Daily Hogs prices on Thursday were sharply lower, which pressured the market. Friday stayed soft losing .56 to $85.86 on a carcass base price, and live prices were 5.82 lower to $63.42. The soft cash close will pressure prices today. In addition, to softer to negative fundamentals, the technical picture is looking more concerning. The weak cash trend keeps the pressure on the market, which is reflected in the Lean Hog Cash index, which was .78 lower to 97.96. For the week, the index dropped 3.36, as the index has moved under the 100.00 point level for the first time since April. Carcass values are trending softer, in a typical seasonal window for softness. The pork carcass cutout was slightly higher at midday on Friday, but closed lower trading 3.60 lower to 105.10. The load count was light to moderate at 306 load.
Author
Matthew Strelow