Ahead of the Open | December 1, 2022

GRAIN CALLS

Corn: Steady to 2 cents higher.

Soybeans: 5 to 6 cents lower.

Wheat: 2 to 6 cents lower.

GENERAL COMMENTS: Soybean futures fell overnight in a corrective pullback from this week’s rise to 2 1/2-month highs. Wheat futures also fell, while corn erased earlier declines and firmed slightly by the close of overnight trading. Malaysian palm oil futures dropped 3.6% on weakness in soyoil and strength in the ringgit, while front-month crude oil was up around $2. U.S. stock index futures signal a firmer open and the U.S. dollar index is down around 1,000 points after sinking to the lowest level since mid-August.

USDA reported a daily sale of 114,300 MT of corn for delivery to Mexico during the 2022-23 marketing year.

China is set to announce in coming days an easing of its Covid-19 quarantine protocols and a reduction in mass testing. China will allow some people who test positive for Covid-19 to quarantine at home, among supplementary measures to be announced in coming days, two sources with knowledge of the matter told Reuters.

EPA this week will propose increases in the amount of ethanol and other biofuels oil refiners must blend into fuel, Reuters reported late Wednesday, citing two sources familiar with the situation. EPA’s proposal reportedly calls for overall blending mandates of 20.82 billion gallons in 2023, 21.87 billion gallons in 2024 and 22.68 billion gallons in 2025, with volumes of conventional corn-based ethanol at 15 billion gallons in 2023 and 15.25 billion gallons each in 2024 and 2025.

A deal is “quite close” to resume Russian ammonia exports via a pipeline to a Black Sea port in Ukraine, United Nations aid chief Martin Griffiths told a Reuters NEXT event, stressing that it was “almost more important” than ensuring grain exports.

After the House cleared a bill averting a crippling nationwide U.S. freight rail strike, the measure heads to the Senate. Quick Senate action on the bill will depend on obtaining unanimous consent to waive days of standard procedural delays on floor votes, with several senators already signaling that may not occur. Labor Secretary Marty Walsh and Transportation Secretary Pete Buttigieg will meet with Senate Democrats today to discuss the legislation.

Traders expect USDA to report October soybean crush totaled 196.0 million bu., based on a Bloomberg survey. That would be up 28.4 million bu. (16.9%) from September though 0.5% below last year. Corn-for-ethanol use is expected to rise 50.2 million bu. (13.1%) from September to 433.3 million bu., though that would be down 7.4% from October 2021.

State-controlled trader United Grain Company (UGC) expects Russia to export 53 MMT to 54 MMT of grain in 2022-23, its deputy head Ksenia Bolomatova told an agriculture conference. The country’s ag ministry forecasts the country will export around 50 MMT of grain this year.

Sunflower oil’s discount to rival soyoil has widened this week to the highest level in more than nine months as leading exporters Ukraine and Russia aggressively offered the oil to bring down their stocks, industry officials told Reuters. The discount could prompt buyers such as India and European countries to increase purchases of sunflower oil in the coming months and reduce buying of soyoil, which could weigh on its prices.

South Korea purchased 133,000 MT of corn expected to be sourced from South America or South Africa. Algeria purchased between 450,000 and 500,000 MT of optional origin milling wheat.

CORN: USDA reported net U.S. corn sales of 602,700 MT during the week ended Nov. 24, down from 1.85 MMT the previous week and at the low end of trade expectations ranging from 475,000 MT to 1.0 MMT. Mexico led buyers at 387,100 MT, including decreases of 2,700 MT.

SOYBEANS: USDA reported net weekly soybean sales of 693,800 MT, up from 690,100 MT the previous week and at the lower end of trade expectations ranging from 550,000 MT to 1.0 MT. China led buyers at 927,400 MT, including 524,000 MT switched from “unknown destinations” and decreases of 70,200 MT. January soybeans fell as low as $14.55 overnight after gaining 10 cents Wednesday to $14.69 1/2, the contract’s highest close since Sept. 20.

WHEAT: Net weekly wheat sales totaled 155,500 MT, down from 511,800 MT the previous week and short of trade expectations ranging from 300,000 to 625,000 MT.

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-firmer

CATTLE: Live cattle futures remain supported by firm cash expectations and a rebound in wholesale beef. Light cash trade started on Wednesday around $155 prices in the Southern Plains, steady compared to last week’s trade in the region. Most feedlots in the region, along with those in the northern market, passed on the bids in hopes of higher prices from packers. But with fresh contract supplies for December now available, packers may slow play trade in the negotiated market. Wholesale beef extended a modest bounce this week as packers’ recent price cuts spurred demand. Choice beef cutout values rose 14 cents to $254.88 on strong movement of 190 loads. February live cattle rose 87.5 cents Wednesday to $155.675, the contract’s highest close since Nov. 22.

USDA reported net weekly U.S. beef sales at 15,400 MT for 2022, up from 12,900 MT the previous week. China led buyers at 7,200 MT.

HOGS: Lean hog futures may extend Wednesday’s rebound on signs of a bottom in the cash market. The national direct cash hog price rose $2.15 on Wednesday, and while the CME lean hog index continues to weaken, the strength in the direct price could signal a seasonal low is drawing closer. December lean hog futures posted strong gains yesterday but remain around $1 below the cash index. Pork cutout values rose $1.65 to $87.33, as a gain of nearly $7 in hams led a rebound from a 10-month low posted Tuesday. Movement was strong at 305 loads. February lean hogs rose $1.20 Wednesday to $85.35.

Net weekly pork sales totaled 20,100 MT for 2022, down from 45,800 MT the previous week. Mexico led buyers at 11,800 MT.