Ahead of the Open | December 26, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 2 to 4 cents higher.
Wheat: Steady to 2 cents higher.
GENERAL COMMENTS: Grain markets were closed overnight due to Christmas, with trading set to resume at 8:30 a.m. CT. Nearly wide spread rain across much of Brazil over the weekend could limit buying interest in grains after the open. Outside markets are supportive for grain futures, as front-month crude oil futures are trading around $1.50 higher and the U.S. dollar index is trading near unchanged.
Much of Brazil will see a good mix of rain and sunshine, with enough rain to support crops in nearly all areas. Mato Grosso will be watched closely though, as the soil is still dry enough regular rain will be needed to prevent increasing crop stress, according to World Weather Inc. Widespread rain fell in Argentina over the weekend, improving soil moisture in the west and maintaining an abundance of soil moisture in other areas, the forecaster says.
The U.S. military carried out retaliatory air strikes on Monday in Iraq after a drone strike from Iran-aligned militants left one U.S. serviceman in critical condition and wounded two others. Meanwhile, the Israeli Prime Minister has vowed to keep fighting in Gaza until Hamas is destroyed, despite global calls for a ceasefire as concerns rise the conflict will spread.
Ukraine struck a large Russian landing warship in Crimea with crude missiles in an overnight attack. The attack likely rendered the landing warship inoperable, dampening Russia’s efforts to control more land off the Black Sea. The missiles were a part of a larger attack on the Crimean port.
Russia’s grain harvest in 2023 will total 142.6 MMT, down 9.5% from last year’s record, according to Russian state statistics. Russian wheat production totaled 92.77 MMT, down from 104.23 MMT in 2022. Russia is the world largest exporter of wheat, expecting to total 65 MMT this year, though exports are limited by lack of vessels and problems with insurance and payments caused by Western sanctions, says Russian Agriculture Minister Patrushev.
CORN: March corn futures continue to face persistent selling. Bulls are seeking to hold support at $4.70, quickly backed by last week’s contract low of $4.68 1/4, with further backing from $4.64. Meanwhile, resistance stands at $4.74, $4.76 1/2, then the 20-day moving average at $4.79 3/4.
SOYBEANS: March soybean futures saw corrective buying Friday, though remain in a steep downtrend on the daily bar chart. Support stands at $13.01 3/4 then $12.98 1/4, with firmer backing from $12.82 1/2. Bulls are eyeing resistance at $13.22 then the 20-day moving average at $13.32.
WHEAT: March SRW futures’ range continues to tighten on the daily bar chart. Bulls are seeking to hold support at $6.12 1/4, $6.09, then the psychological $6.00 mark. Resistance stands at $6.22 3/4, $6.25, then $6.32.
CATTLE: Lower.
HOGS: Lower.
CATTLE: Live cattle futures and feeders are expected to open with a weaker tone following Friday’s Cattle on Feed numbers all coming on the bearish side. Large-lot feedlot population topped expectations, placements fell less than expected and marketings dropped more than expected, which likely points to a weaker open, though sustained weakness is not likely due to the report. Last week’s cash cattle average likely topped the prior week, barring sharp losses on significant movement Friday afternoon. Wholesale beef prices were mixed on Friday, as Choice rose $1.80 to $292.93 and Select dropped 12 cents to $261.15.
HOGS: Lean hog futures are expected to open with a weaker tone following Friday’s bearish Hogs & Pigs report. While the U.S. hog herd came in well above expectations, the sharp revisions to past data will increase trader skepticism toward these numbers and may cause them to believe USDA’s sampling methodology is consistently undercutting hog numbers. The CME lean hog index fell another 44 cents to $66.25 (as of Dec. 21), marking a fresh seasonal low. Wholesale pork prices rose 86 cents on Friday to $82.21, led higher by a $4.92 rise in picnics. Movement remains firm at 318.8 loads, marking continued robust grocer demand.
