Market Snapshot | December 26, 2023

Corn futures are mostly 3 to 4 cents higher at midmorning.

• Corn futures are edging higher amid spillover strength from SRW wheat and support from outside markets.
• South American crop consultant Dr. Micheal Cordonnier left his Brazilian corn estimate unchanged at 117 MMT but indicated a lower bias going forward. Cordonnier noted the country’s corn production will depend on safrinha acreage and yield. Cordonnier also left his Argentine corn estimate unchanged at 53 MMT, with a neutral bias going forward.
• China has issued licenses to 26 domestic seed companies to produce, distribute and sell genetically modified corn and soybean seeds in certain provinces, paving the way for commercial planting of GMO grains. This is China’s first batch of companies to receive GMO seed production and operation licenses.
• USDA reported weekly export inspections of 1.082 MMT (42.6 million bu.) during week ended Dec. 21, up 121,925 MT and above the pre-report range of 450,000 and 925,000 MT.
• March corn futures have extended above resistance at $4.74 1/4, $4.75 1/4, while the 10-day moving average of $4.76 3/4 serves as the next area of resistance. Meanwhile, initial support continues to serve at $4.71 1/2.

Soybeans are mostly 2 to 4 cents lower, while March soymeal is more than $1.50 lower. March soyoil is around 80 points lower.

• Soybean futures are favoring the downside in narrow trade as overhead resistance limits buying efforts.
• Crop consultant Dr. Michael Cordonnier lowered his Brazilian soybean estimate by 2.0 MT to 153 MMT and noted a neutral/lower bias going forward. Cordonnier reported rainfall increased last week in central and northeastern Brazil but amounts and coverage were variable and generally less than what was needed for the drought plagued areas. He left his Argentine estimate unchanged at 50 MMT, with a neutral/higher bias going forward.
• Rain is still needed in Brazil’s northeastern states and in center-west Brazil where weekend precip was inadequate to counter evaporation, according to World Weather Inc. Meanwhile, Argentina and southern Brazil will continue to see alternating periods of rain and sunshine that should prove beneficial for most crops.
• While China’s animal feed production rose in the first 11 months of 2023, the use of soymeal as feedstock dropped 11% year-on-year, according to its agriculture ministry. The nation is trying to reduce its heavy reliance on soymeal exports as part of a push for food security, and is opting to use alternatives for feed, such as sunflower seed, rapeseed and dried distiller’s grains.
• USDA reported weekly export inspections of 1.07 MMT (39.3 million bu.), down 354,601 MT from the previous week but within the pre-report range of 800,000 MT and 1.585 MMT.
• January soybeans are trading narrowly within Friday’s range, limited by the 10-day moving average of $13.10 1/4, while initial support continues to serve at $12.93 1/4.

Winter wheat futures are mostly 15 to 18 cents higher, while HRS is 9 to 10 cents higher.

• Wheat futures are posting gains amid rising Ukraine/Russia tensions and a weaker U.S. dollar.
• 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.
• Holiday weekend precip was welcome in HRW wheat production areas and that which lingers into Wednesday will also be welcome, notes World Weather. Most of the U.S. Midwest moisture situation is very good for wheat and enough improvement has occurred in the Pacific Northwest for “some” benefit to wheat in the spring.
• USDA reported weekly export inspections of 428,663 MT (15.8 million bu.), up 143,871 MT from the previous week and above the pre-report range of 250,000 to 400,000 MT.
• March SRW futures have extended above the 100-, 20- and 10-day moving averages as well as resistance at $6.19 1/4, $6.22 1/2 and $6.26 3/4. Additional resistance serves at the Dec. 6 high of $6.49 1/2, while initial support lies at $6.15.

Live cattle are posting slight- to moderate gains, while feeders are modestly lower.

• Live cattle are modestly higher despite Friday’s bearish-leaning Cattle on Feed Report.
• USDA’s Cattle on Feed Report estimated the Dec. 1 large feedlot (1,000-plus) head inventory increased 313,000 head (2.7%) from year-ago. November placements of cattle into feedlots declined 1.9%, while November marketings fell 7.4%.
• USDA’s Cold Storage Report showed beef stocks totaled 454.7 million lbs., up 9.0 million lbs. (2.0%) from October. The five-year average was a 10.4-million-lb. increase during the month. Beef stocks fell 68.6 million lbs. (13.1%) from year-ago and were 49.0 million lbs. (9.7%) less than the five-year average.
• Cash cattle trade through last Thursday averaged $170.13, which will likely be enough to end the six consecutive weeks of cash cattle weakness. Holiday-shortened kill schedules are likely to weigh on prices, though packers appear to be short-bought on slaughter needs.
• Choice boxed beef rose $1.80 Friday to $292.93, while Select gave up 12 cents to $261.15. Movement was light at 90 loads.
• February live cattle continues to find support at $167.73, while the 20- and 10-day moving averages of $168.54 and $168.69 are limiting buying efforts.

Lean hogs are marking notable losses at midsession.

• Nearby lean hogs are notably lower following Friday’s bearish Hogs & Pigs Report and persisting weakness in the cash index.
• USDA’s Hogs & Pigs Report estimated the U.S. hog herd at 74.971 million head as of Dec. 1, up 15,000 head from year-ago, whereas traders expected a 481,000-head decline. The market hog inventory increased 221,000 head (0.3%) from year-ago, while the breeding herd declined 205,000 head (3.3%).
• USDA’s Cold Storage Report showed pork inventories totaled 416.1 million lbs. at the end of November, down 21.8 million lbs. (5.0%) from October. The five-year average was 45.2-million-lb. decline during the month. Pork stocks fell 35.5 million lbs. (7.9%) from year-ago and were 55.1 million lbs. (11.7%) under the five-year average.
• The CME lean hog index is down 44 cents to $66.25 as of Dec. 21, marking a fresh seasonal low.
• The pork cutout value rose 86 cents Friday to $82.21, while movement was solid at 318.8 loads.
• February lean hogs have edged below the 10-day moving average of $70.23, while additional support lies at the 20-day moving average of $69.83. Initial support stands at $71.21.