Ahead of the Open | November 20, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 10 to 13 cents higher.
Wheat: Winter wheat steady to 2 cents lower; HRS 2 to 4 cents lower.
GENERAL COMMENTS: Corn and soybeans reversed early overnight losses and into the break nearer session highs, as soybeans continue to lead strength. Wheat futures slipped, continuing last week’s weakness. Outside markets were supportive overnight, as front-month crude oil futures rallied amidst reports of a potential OPEC supply cut. The U.S. dollar index, currently about 330 points lower, is trading on 11-week lows.
Portions of central Brazil received light precipitation over the weekend, while southern areas received heavy rains. Not much change occurred for center west, center south or interior northeastern Brazil over the coming ten days, as isolated showers and thunderstorms are likely to pop up across key summer crop areas, World Weather Inc says. The forecaster notes they do not see crop areas nearly as hot and dry as it has been for quite a while.
Meanwhile, World Weather Inc reports a good mix of rain and sunshine in Argentina over the coming two weeks.
Soybean planting in Brazil reached 68% completed as of Nov. 16, according to AgRural. This compares to 61% a week prior and 80% last year. That marks the slowest pace since 2019/20. Crop concerns remain in Mato Grosso with irregular rains and high temperatures, leaving producers torn between replanting, leaving the crop as is or abandoning parts of it and going straight to planting the second crop in early 2024.
Javier Milei, a far-right libertarian often likened to Donald Trump, won the Argentine presidential election in a significant rightward shift for the country. Milei, a 53-year-old economist and former TV personality with limited political experience, won with 56% of the vote, defeating center-left economy minister Sergio Massa, who conceded defeat before official results were released. The coming president promises to reduce spending and taxes, eliminate the country’s central bank and replace the rapidly inflating Argentine peso with the U.S. dollar. Milei will be sworn in on Dec. 10.
This morning, USDA reported daily sales of 104,000 MT of corn for delivery to Mexico during the 2023-24 marketing year
CORN: December corn futures are in the lower end of the recent sideways range, bulls are seeking to defend support at the overnight low of $4.64 1/2, with backing from the recent move-low close at $4.64, then $4.61. Bears are seeking to defend resistance at $4.70 on additional buying, backed by $4.74.
SOYBEANS: January soybean futures gapped lower on the overnight open but have since found buyers under the market. Prices dipped below trendline support at $13.40, which will be backed by last night’s low of $13.27. Buyers are eyeing resistance at $13.56 3/4, then $13.66.
WHEAT: December SRW futures saw mild selling pressure overnight, though losses were largely kept in check by support at $5.47. Bulls are looking to defend the Sept. 29 contract low of $5.40 on additional selling pressure. Bulls are targeting initial resistance at $5.56 1/4, then $5.63.
CATTLE: Choppy/higher.
HOGS: Higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone, though volatility stemming from Friday’s Cattle on Feed Report could stifle gains. The report showed the Nov. 1 feedlot inventory up 1.7% from year-ago, as placements rose 3.8% and marketings declined 2.5%. All three categories were close to the pre-report estimates. The average price for cash cattle is likely to fall from the prior week, as trade up to Friday averaged $2.05 below the prior week. Wholesale beef prices were mixed on Friday, with Choice slipping 85 cents to $293.87 and Select rising $3.05 to $270.70.
HOGS: Lean hog futures are expected to open mostly higher as technical buyers remain firm in the market. Wholesale pork continues to trade largely sideways, though a jump in bellies pushed prices into the upper end of the recent sideways range. Cutout values rose $2.24 Friday to $88.16, the third highest quote in the past three weeks. The CME lean hog index fell 59 cents to $75.09 today (as of Nov. 16), marking a new for-the-move low. While the cash market has shown glimpses of an early seasonal low, pressure is still being felt as market-ready supplies build.
