Ahead of the Open | December 30, 2022
GRAIN CALLS
Corn: Narrowly mixed; 2 cents lower to 2 cents higher.
Soybeans: 10 to 15 cents higher.
Wheat: Narrowly mixed; 2 cents lower to 2 cents higher.
GENERAL COMMENTS: Soybean and soymeal futures posted strong gains overnight amid concerns with Argentina’s weather and crop prospects. Corn and wheat traded in narrow ranges in quiet trade. We expect similar price action on the reopening this morning, though positioning for year-end and ahead of the extended holiday weekend could lead to some profit-taking pressure. Malaysian palm oil futures rose on Friday as top producer Indonesia tightened its export rules, although the benchmark contract logged an annual loss after three years of gains. Front-month crude oil futures traded slightly lower overnight, while the U.S. dollar index has firmed after earlier mild pressure.
Grain and livestock markets trade normal hours today ahead of the three-day holiday weekend. All markets and government offices are closed Monday, Jan. 2, in observance of New Year’s Day. As a result, there will be no Pro Farmer market reports next Monday. Grain and livestock markets will reopen at 8:30 a.m. CT on Tuesday, Jan. 3. Pro Farmer wishes you a prosperous 2023.
USDA reported daily soybean sales of 186,000 MT to unknown destinations for 2022-23.
World Weather Inc. says Argentina will get some beneficial rain late this weekend into Monday, but it will not be enough to carry crops through the following week of dry and warm biased weather without being notably stressed once again.
The Buenos Aires Grain Exchange rated Argentina’s soybean crop 10% good/excellent (down two points from last week), 62% normal (down one point) and 28% poor (up three points). The exchange rated the corn crop 15% good/excellent (unchanged), 57% normal (down two points) and 28% poor (up two points).
Brazil will continue to see favorable production potential because of timely rainfall and seasonable temperatures. World Weather says, “Some heavy rain is still expected in center-south crop areas in the coming week, but the impact should be low as long as lighter rainfall resumes when the harvest season arrives.”
For the week ended Dec. 22, USDA reported the following export sales:
Corn: Net sales of 781,600 MT for 2022-23, included 463,600 MT to Mexico. Sales were near the middle of expectations, which ranged from 600,000 to 850,000 MT. Exports of 1.013 MMT were primarily to Mexico (441,600 MT), China (278,400 MT) and Japan (124,200 MT).
Soybeans: Net sales of 705,800 MT for 2022-23 were primarily to China (521,200 MT, including 334,000 MT switched from unknown destinations and decreases of 137,400 MT). Sales were in the middle of expectations ranging from 500,000 to 900,000 MT. Exports of 1.849 MMT were primarily to China (1.078 MMT)
Wheat: Net sales of 478,100 MT for 2022-23 were above the top end of expectations that ranged from 200,000 to 450,000 MT. Weekly exports totaled 337,100 MT.
CORN: March corn futures traded in a tight 3 1/4 cent range overnight. The contract paused yesterday and again overnight after recent strong gains. Near-term resistance is Wednesday’s high at $6.83 1/2. Near-term support is layered from $6.77 to $6.72 1/2.
SOYBEANS: March soybeans traded as high as $15.35 overnight, the highest level for the contract since June 17. Near-term resistance is at $15.45 3/4, with support at $15.08 and then the psychological $15.00 mark.
WHEAT: March SRW wheat traded narrowly on either side of unchanged overnight. Near-term resistance is at $7.87 1/2. Trendline support drawn off the December lows intersects around the $7.60.
LIVESTOCK CALLS
CATTLE: Higher
HOGS: Steady/weaker
CATTLE: Live cattle futures are expected to open with a firmer tone on followthrough buying after Thursday’s strong performance. Fundamental support will come from the cash market. Cash cattle prices trade started in the $157 to $158 area in the Southern Plains and around $248 to $250 in the northern dressed markets – $1 to $2 higher than last week in both markets. Packers increased slaughter runs significantly from week-ago to take advantage of the recent surge in wholesale Choice beef prices and vastly improved margins, raising the need to secure more supplies for next week’s production schedule. But there is the risk of profit-taking on year-end positioning and ahead of the extended holiday weekend. Net weekly beef export sales totaled 2,300 MT for 2022 and 7,200 MT for 2023.
HOGS: Lean hogs are expected to open with a weaker tone this morning following a low-range close yesterday. Profit-taking on year-end positioning and positioning ahead of the extended holiday weekend could also weigh on the market. But the downside should be relatively limited by signs the cash market may be forging a seasonal low. After a $2.09 surge yesterday, the CME lean hog index is up a modest 5 cents to $80.74 (as of Dec. 28). The cash market is starting to firm amid tightness in market-ready supplies. The weekly Iowa/southern Minnesota report for the week ended Dec. 24 showed the average weight of hogs at 283.2 lbs., down a whopping 7.6 lbs. from year-ago. Net weekly pork export sales totaled 15,100 MT for 2022 and 30,500 MT for 2023.
