Ahead of the Open | December 1, 2021
GRAIN CALLS
Corn: 4 to 5 cents higher.
Soybeans: 7 to 9 cents higher.
Wheat: 3 to 12 cents higher.
GENERAL COMMENTS: Corn, soybean and wheat futures rose overnight as grains joined other commodities in a corrective bounce from steep declines on Tuesday. Malaysian palm oil rose from an eight-week low posted yesterday, while Nymex crude oil jumped over 3.0% following yesterday’s plunge to three-month lows. The U.S. dollar index is weaker this morning.
The U.S. soybean crush in October may have reached a nine-month high of 5.868 million short tons, or 195.6 million bu., based on a Reuters ahead of USDA’s monthly Fats and Oils report today. The projected increase would echo a similar crushing surge reported by the National Oilseed Processors Association (NOPA) earlier this month. If the estimate is realized, the crush would be up from 164.1 million bu. processed in September and the largest monthly crush since January. But it would be below the October 2020 crush of 196.6 million bu., the all-time high for a single month.
U.S. soyoil stocks as of Oct. 31 were expected to rise to 2.340 billion lbs., based on the average of estimates from six analysts, compared with 2.177 billion lbs. at the end of September and 1.968 billion lbs. at the end of October 2020.
Ukraine exported 5.8 MMT of grain in November, including nearly 2.2 MMT of wheat. Through the first five months of 2021-22, Ukraine shipped 25.3 MMT of grain, including 14.5 MMT of wheat, 5.5 MMT of corn and 4.9 MMT of barley. Ukraine’s grain shipments are running nearly 20% ahead of last year’s pace.
The world's sugar supply is expected to tighten in 2021-22 due to higher use of sugarcane in ethanol production in India and a smaller crop in Brazil, broker StoneX said. The season will see demand surpassing production for the third consecutive year, with StoneX projecting a supply deficit of 1.8 MMT, 1 MMT more than it estimated in October.
CORN: March corn futures rose as high as $5.75 1/2 in narrow-range trade overnight after tumbling to a three-week closing low yesterday at $5.67 1/2. A recent six-week uptrend was negated with recent losses and breaking of some key support levels could fuel more declines. Key support levels in March futures include $5.57 1/2, the November low, as well as the 50- and 100-day moving averages around $5.58 3/4 and $5.55 1/4, respectively. For market bears, the next downside target is closing March below at $5.50. Strong demand from domestic ethanol producers may help limit the downside.
SOYBEANS: January soybeans reached a high of $12.32 3/4 overnight after yesterday ending with a decline of 2.6% for November, the fifth consecutive monthly decline. Soybean bears have a solid near-term technical advantage, with futures having moved back below a downtrend line drawn from the June and July highs. Chart levels to watch include the November low at 11.81 1/4.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-mixed
CATTLE: Live cattle futures remain in an uptrend despite yesterday’s declines but the upside may be limited by wholesale beef weakness and signs of waning in recent cash strength. Some feedlots sold hedged cattle at $138 in the Southern Plains and Iowa yesterday. The initial cash trade was at virtually steady prices with last week’s average but down about $2 from the top end. Other feedlots passed on the steady bids for now in hopes of higher prices later this week, though packers may not need to buy much after recent aggressive purchases and fresh supplies of contracted cattle available for December. Also, wholesale beef prices started this week on a weak note. Choice boxed beef dropped $5.90 yesterday to an average of $271.68, the lowest daily price since July 27. Movement totaled 199 loads.
February live cattle yesterday fell $1.40 to $137.90, the lowest closing price since $137.70 on Nov. 19 but still up 2.6% from the end of October for the second straight monthly gain.
HOGS: Lean hog futures sank near a three-week low yesterday but may find followthrough from a late rebound and signs of improved pork demand. Pork cutout values fell $1.01 yesterday to an average of $86.70, but movement totaled a strong 440 loads. Packers moved more than 775 loads of pork the first two days this week, which signals strong retailer demand. National direct carcass values rose $1.45 to $56.60. The next CME Lean Hog Index is down 56 cents to $70.04, the lowest reading since early February and $3.335 under December futures. February lean hogs yesterday fell 95 cents to $79.975, the lowest closing price since Nov. 11 but still up 1.6% for the month.
