Ahead of the Open | December 15, 2023
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: Winter wheat 4 to 6 cents lower; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat pivoted around unchanged most of the night, though wheat favored the downside into the break. A member of the Federal Reserve backtracked some of Wednesday’s dovish comments this morning, which sent the U.S. dollar index nearly 500 points higher. Front-month crude oil futures are trading near unchanged.
USDA reported daily sales of 134,000 MT of soybeans for delivery to China and 447,500 MT of soybeans to unknown destinations- each for the 2023-24 marketing year.
Analysts expect the National Oilseed Processors Association to report its members crushed 186.0 million bu. of soybeans in November. If realized, that would be down 2% from the all-time record in October, but up 3.8% from year-ago and a record for the month. It would also be the third largest NOPA crush figure on record for any month. Soyoil stocks are forecast at 1.138 billion lbs., which would be up 3.5% from October that was the smallest stockpile since December 2014.
Ukraine is sticking to its combined grain and oilseeds exportable surplus forecast of 50 MMT despite a higher crop outlook, the first deputy ag minister said. The ministry last week raised its 2023 grain and oilseeds harvest forecast to 81.3 MMT from 79.1 MMT previously. As of Dec. 16, Ukraine had exported 15.3 MMT of grain in 2023-24, down from almost 20 MMT on that date last year. Ukraine’s 2023-24 grain exports included 6.5 MMT of wheat, 7.7 MMT of corn and 933,000 MT of barley.
There is a disagreement in the House regarding comments made by House Ag Committee Ranking Member David Scott (D-Ga.) who expressed his disappointment in the chamber’s failure to address a new farm bill in December, as House Speaker Mike Johnson (R-La.) had previously promised when he assumed his role. Scott’s comments quickly provoked a response from Republicans on the panel, who pointed out on social media he had previously issued a statement welcoming the extension of the 2018 Farm Bill. This extension was seen to allow lawmakers more time to develop the new bill without being constrained by the approaching deadlines at the end of 2023, when certain provisions of the 2018 Farm Bill were set to expire. Some say this raises questions about the progress and timing of the legislative effort and that Democrats may want to wait until after 2024 elections to complete a farm bill on the belief they may retake control of the House.
CORN: March corn futures continue to trade in a tight downtrend on the daily chart, with initial resistance at $4.82, quickly backed by the downtrend line stemming from the December high at $4.83. Additional buying would target the 40-day moving average at $4.87 3/4. Support lies at $4.77 1/4, $4.75 3/4, then $4.70 1/2.
SOYBEANS: January soybean futures are tightening on the daily bar chart. The 10-day moving average, currently at $13.18, capped gains overnight. Further resistance lies at $13.25, then $13.30. Support lies at the uptrend line stemming from the December low at $13.12, with backing from $13.04, then the psychological $13.00 mark.
WHEAT: March SRW futures continue to flag on the daily bar chart. Resistance lies at the upper end of the recent range at $6.21 1/2, which prices failed to overcome overnight. Additional resistance lies at $6.25 3/4, with backing from $6.31 3/4. Support lies at $6.09, the 40-day moving average at $6.06 1/2, then the psychological $6.00 mark.
CATTLE: Choppy/lower.
HOGS: Higher.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone as bulls continue to struggle garnering much bullish momentum. While futures closed higher on Thursday, bulls were unable to maintain the morning’s gap higher, as sellers took advantage of higher prices. While futures are showing sharp gains on the week, cash cattle prices continue to trade hands at lower prices, which is likely to limit buying in futures, unless data shows fresh cash strength. Wholesale beef prices were mixed Thursday, as Choice rose 68 cents to $292.32 and Select fell 95 cents to $258.26, while movement remained strong at 170 loads.
HOGS: Lean hog futures are expected to open with a firmer tone on followthrough buying. Futures surged on Thursday on firm volume as traders are seemingly anticipating a seasonal low ahead of the February contract’s expiration. While the CME lean hog index posted gains yesterday, those gains were short-lived, as the index fell 38 cents to $67.75 today. That reversal lower could limit gains in futures today, with price action likely to remain volatile as traders wait on clear signs of a seasonal low in the cash market. Wholesale pork prices slipped 36 cents to $83.57, with losses in picnics and hams largely offset by corresponding gains in butts and bellies.
