3 Big Things Today, October 25
1. Soybeans Rebound From Tuesday’s Losses as Price Stays Above Key Technical Level
Soybeans rebounded from yesterday’s losses, rising overnight, as the November contract remains above key technical levels, at least for now.
The prices of soybeans and grains have been locked in a trading range for several weeks as hedgers and other investors weigh the strong yields reported from the Corn Belt against harvest delays.
From a fundamental standpoint, not much has really changed in the past few weeks, but technically, soybeans are holding firm above the key technical level of $9.75½ (the 200-day moving average), which has underpinned prices.
As long as the price stays above that level, it shouldn’t fall too far. A move below, however, may trigger further technical selling, Allendale analysts said in a report on Wednesday morning.
For corn, the December contract on Tuesday closed at the highest for the month of October. The price, however, is meeting resistance at the $3.54 level, which is the 50-day moving average, Allendale said.
Corn futures are little change, holding steady just below $3.54 a bushel.
Soybean futures for November delivery rose 6¾¢ to $9.82¼ a bushel overnight on the Chicago Board of Trade. Soy meal gained $2.70 to $316.90 a short ton, and soy oil added 0.24¢ to 34.58¢ a pound.
Corn futures for December delivery increased ¾¢ to $3.53½ a bushel overnight.
Wheat for December delivery rose 1½¢ to $4.39½ a bushel in Chicago. Kansas City futures gained 1¼¢ to $4.35¼ a bushel.
2. Pork Industry Expected to Expand Through at Least 2025 as Efficiencies, Exports Improve
The U.S. pork industry will likely expand through 2025, but growth hinges on increasing exports, according to a recent report from Rabobank.
Senior Analyst Sterling Liddell said in the report that he expects the industry to grow “steadily” and see increased efficiencies with rising carcass weights and pigs-per-female as key drivers of the expansion.
The hog and pork sectors in the past decade moved from sluggish output and tight margins to a production recovery phase that was incentivized by positive margins, Rabobank said. Contributing to this was the rise and fall of feed costs, the breakout of Porcine Epidemic Diarrhea virus (PEDv), the ensuing recovery and the aftermath, increased consumption, and the rise in global demand.
Increased processing capacity and efficiency “removes a bottleneck that periodically limits the flow of pork to consumers,” Liddell said.
Expansion in the industry will be based broadly on pork exports from the U.S., which need to increase by 400,000 metric tons to remain in a profitable expansion mode, as domestic consumption per-capita is expected to only grow slightly, he said.
Rabobank said in the report it expects exports to China will increase by 100,000 tons by 2025 and shipments to Mexico to rise by 200,000 tons.
“The challenge will be to find an additional 100,000 tonnes of export in the global market,” the bank said.
3. Strong Winds, Blizzard Conditions For Upper Midwest as Winter Arrives
Strong winds and blizzard conditions are expected for much of eastern North Dakota, northeastern South Dakota, and all of western Minnesota as winter finally makes its way into the Upper Midwest.
A high-wind watch is in effect for the area as winds are forecast up to 55 mph, according to the National Weather Service.
A winter storm warning, meanwhile, is also in effect for several counties in the area. Blizzard conditions are possible as are snow accumulations of up to 4 inches, the NWS said in an early report on Wednesday morning.
The combination of the strong winds and snow will create whiteout conditions in some areas.
A hard freeze watch is now in effect for much of western Kansas, with temperatures expected from 23˚F. to 27˚F. for several hours starting Thursday night, according to the NWS. A freeze watch is in effect for central parts of the state.