Ahead of the Open | December 21, 2023

Ahead of the Open
Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 1 to 3 cents higher.

Soybeans: 1 cent lower to 1 cent higher.

Wheat: 4 to 6 cents higher.

GENERAL COMMENTS: Wheat futures showed relative strength overnight despite weakness in the soy complex, while corn traded in a tight range. Outside markets were mixed overnight, as U.S. stock indices saw a bounce following Wednesday’s selloff. Front-month crude oil futures favored the downside as Angola, the second-largest oil producer in Africa, opted to leave OPEC. The U.S. dollar index favored the downside and is currently trading nearly 500 points lower and near recent lows.

European Union soft wheat production is expected to decline next year, due mainly to wet weather in France. In its initial projections for the 2024-25 crop, Strategie Grains forecast soft wheat production at 124.8 MMT, down from 125.9 MMT this year. The firm lowered its estimate for the total soft wheat area to 21.2 million hectares, which would be down 2.4% from 2023-24. The area sown with soft wheat for 2024-25 in France is set to fall to its lowest level since at least 2000 at 4.24 million hectares two months of heavy rain took their toll on crops, consultancy Argus Media said on Wednesday.

Greece said on Thursday it would send a naval frigate to the Red Sea to protect shipping after attacks by Yemen's Iran-backed Houthi group. On Wednesday, the Greek Shipping Ministry advised commercial ships sailing in the Red Sea and the Gulf of Aden to avoid Yemeni waters. The U.S. on Tuesday launched a multinational operation to safeguard commerce in the Red Sea from attacks by Houthi militants. Yemen’s Houthi rebels vowed to continue targeting ships in the Red Sea, despite these efforts.

Export sales for the week ended Dec. 14:

Corn: Net sales of 1.013 MMT for 2023-24, down 29% from the previous week and 33% from the four-week average. Increases came primarily for Mexico and Japan. Traders expected sales of 800,000 MT to 1.5 MMT.

Soybeans: Net sales of 1.989 MMT for 2023-24, up 84% from the previous week and 51% from the four-week average. Increases came primarily from unknown destinations (785,500 MT) and China (700,400 MT). Sales came in the middle of expectations of 1.5 to 2.5 MMT.

Wheat: Net sales of 322,700 MT for 2023-24, down 78% from the previous week and 51% from the four-week average. Increases came primarily for Mexico, Japan and Indonesia. Traders expected sales of 200,000 and 600,000 MT.

 

CORN: March corn futures traded in a tight range overnight, with prices largely supported by downtrend line support that extends back to the May lows. Bulls are seeking to hold this support at $4.69 1/2, with further backing from $4.64. Resistance stands at $4.73 1/2 then $4.76 3/4.

SOYBEANS: March soybean futures continue to fall under pressure and are posting losses for the third straight session. Bulls are seeking to hold support at $13.11 3/4, quickly backed by $13.10 1/4, then the psychological $13.00 mark. Resistance stands at $13.20 3/4 then the 10-day moving at $13.27 3/4.

WHEAT: March SRW futures saw corrective gains overnight, continuing the recent trend up alternating higher and lower sessions. Resistance stands at $6.16 1/2 with backing from $6.25 1/4. Meanwhile, support lies at $6.08 3/4 with further backing from $6.02 1/2.

 

LIVESTOCK CALLS

CATTLE: Higher.

HOGS: Choppy/lower.

CATTLE: Live cattle futures and feeders are expected to open with a firmer tone in continuation of Wednesday’s technical strength. Bulls have maintained a technical uptrend from the early December low. While minimal cash trade has taken place this week at $169.00, feedlots passed on a smattering of steady cash cattle bids Wednesday as they were encouraged by strong gains in futures. That suggests this week’s eventual trade will take place at higher prices, especially as packers are thought to be short-bought on slaughter needs. Wholesale beef prices were mixed on Wednesday, as Choice rose 30 cents to $289.13 and Select dropped $1.56 to $261.60. USDA reported net beef export sales of 9,700 MT for 2023, down 8% from the previous week but up 44% from the four-week average. USDA reported net sales of 6,400 MT for 2024.

HOGS: Lean hog futures are expected to open with a mostly weaker tone as uncertainty in the cash market is likely to continue recent weakness. Futures have trended lower this week but have still maintained most of last week’s gains. While the CME lean hog index firmed 17 cents to $66.54 today (as of Dec. 19), February futures remain $3.685 above the index, which opens the door for additional weakness until stronger and sustained price gains in the index convince traders the seasonal low is in place. Wholesale pork prices fell to a fresh seasonal low on Wednesday, as cutout fell $1.70 to $81.36, with picnics as the sole gainer on the day. USDA reported net pork export sales of 37,500 MT for 2023, up 33% from the previous week and 48% from the four-week average. USDA reported net sales of 25,500 MT for 2024. Weekly exports of 40,500 MT were a high for the year.

 

 

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