CORN
Corn futures were narrowly mixed overnight with a weaker bias. December corn is down 3 cents to 5.40-1/2. Weekly Ethanol Stats will be out today, Exports tomorrow. Production is seen slightly higher than last week at 1.097 mil barrels per day. Stockpile average estimate is 20.341 mil bbl vs 20.08 mil a week ago. This would be the second straight weekly increase in stocks after falling to a four-month low on Oct. 8. Meanwhile, the market is underpinned Supply/Demand fundamentals and now, rain delaying U.S. harvest progress. In addition, ongoing concerns about rising 2022 planting supplies keep the market buoyant. Basis bids for soybeans and corn shipped by barge to the U.S. Gulf Coast strengthened on Tuesday as harvest delays stemming from heavy weekend rains in the Midwest slowed the flow of grain into marketing channels, traders said. Outside markets show the dollar choppy this morning and crude down nearly $1.00/bbl while scrawling some near-term topping action on the charts.
SOYBEANS
The soy complex is down this morning with Nov beans off 8 cents to 12.30, Meal down 1.70 per ton; And, soyoil down 38 cents. Chinese Ag futures had Jan beans down 44 yuan; Soymeal down 17; Soyoil down 50; Palm oil down 52; Corn down 11. Malaysian palm oil prices overnight were down 42 ringgit (-0.84%) at 4970 tracking losses in global edible oils, with prices further dragged by concerns that robust Indian demand will fizzle out. The U.S./China Phase 1 trade deal expires Dec 31 with China behind in buying U.S. Ag goods. Two export sales were announced yesterday, one to Mexico, and one to China. Brazilian truckers enter a third day of striking due to high fuel prices. The farmers there have 36% of their bean crop planted amid growing production estimates. Look for bean futures to remain uneven in the face of old crop demand uncertainty and 2022 planting intentions.
WHEAT
Wheat futures are down 3 to 5 cents across the board this morning along with with weakness in row crops, and on follow-through from Tuesday’s weak closes. Dec Chicago wheat is back-peddling from last week’s highs and was down as much as 7-1/4 cents to 7.45 last night before running into 10 and 20-day Moving Average support. Dec KC hit an overnight low of 7.71-1/2. Dec MPLS fell 10-3/4 cents to 10.10-3/4 as that market corrects from making new contract highs on Tuesday. Spot basis bids for hard red winter wheat were steady-to-firmer at truck terminals Kansas on Tuesday, grain dealers said. Russian domestic wheat prices are higher than export prices, limiting farmer selling to export facilities there.
CATTLE
Cattle futures are called higher after making moderate to strong gains again on Tuesday with some follow through buying from Monday, supported by the talk of firmer cash and Choice carcass values. December cattle pushed through resistance toward the end of the session, closing above the 100-day moving average, opening the door for further technical upside. Light cash trade started in Nebraska at $126, and bids remained firm to start the trade for the week. Those few scattered deals are not enough to develop a trend yet, but prices are $1-2 higher than last week on those early trades. Closing retail values were mixed as Choice carcasses gained 1.72 to 284.76, but Select dropped 065 to 262.54. This was following a firmer close on Monday, which added to the buying strength. The load count was light/moderate at 66 loads. The Choice/Select Spread has moved wider to 21.99 at midday, again a reflection of the demand for the Choice beef product. Feeder cattle saw buying across the market fueled by strength in the live cattle market. October Feeder cattle expire on 10/28, and are pulled in line with the Feeder Cash Index at 155.50.
HOGS
Hogs are called lower following active selling pressure on Tuesday amid the ongoing weakness in the cash market and retail market. Dec hogs broke technically while posting its lowest close since September. The sharply lower close at the low end of the trading range will likely open the door for additional selling pressure today. The overall cash market remains soft, and the Cash Hog Index reflects that, trading .72 lower to 82.98. The discount of the index to futures is still viewed as supportive closing at 10.405. The pork carcass cutout Index traded softer, down 1.21 to 97.46, reflecting the tone in the retail pork values. At midday, the retail pork carcass prices gained a little ground, but softened into the close, trading .33 lower to 94.25 on very good movement of 450 loads. Concerns in longer-term demand will keep selling pressure in the market into the summer months, as overall global export demand is likely softening. The hog market is on a slippery slope, and the technical picture and fundamental picture both point to lower. The low is still likely ahead of the market overall.
Author
Matthew Strelow