Ahead of the Open | December 10, 2021

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GRAIN CALLS

Corn: Steady to 2 cents higher.

Soybeans: 3 to 5 cents higher.

Wheat: 4 to 11 cents higher.

GENERAL COMMENTS: Wheat futures posted corrective gains overnight, while corn and soybeans also firmed. Malaysian palm oil rose slightly and heading for a gain of over 3.0% this week. Nymex crude oil is up more than $1 and the U.S. dollar index is down slightly.

The U.S. consumer price index for November rose 0.8% over October and jumped 6.8% from the same month a year ago, the largest year-over-year increase since June 1982. CPI was expected to rise about 6.7% year-over-year. Accelerating inflation may prompt the Federal Reserve to more aggressively taper its monthly bond purchases and boost interest rates sooner than previously expected to rein in surging prices.

Chinese buyers have made large purchases of French wheat and barley, along with Ukrainian corn and barley, over the past week, Reuters reported. Chinese importers secured at least several hundred thousand metric tons of grain from the two countries, taking advantage of a pause in surging prices to cover some of their feed grain needs.

The sliding tax on Russian wheat exports will rise to $91.00 per metric ton for Dec. 15-21, up from the current $84.90 rate. The wheat export tax has surged $62.90 (224%) from the initial level of $28.10 at the beginning of June when Russia’s government launched its formula-based duty.

Japan purchased 260,312 MT of wheat in its weekly tender, including 160,802 MT from the U.S. and 99,510 MT from Japan.

 

CORN: March corn futures reached a two-week high of $5.93 1/2 shortly before the close of overnight trade and are up from $5.84 at the end of last week. Prices climbed in six of the past seven sessions amid strong ethanol demand and signs of strengthening exports.

SOYBEANS: January soybeans reached $12.69 overnight and are up slightly from $12.67 1/4 at the end of last week. January soymeal rose as high as $363.00, the highest intraday price since Nov. 23, and are on pace for a second consecutive weekly gain.

WHEAT: March SRW wheat futures overnight fell to a six-week low at $7.68 before recovering but are still heading for a second straight weekly decline. Prices tumbled yesterday after the USDA boosted U.S. and global ending stocks forecasts more than expected.

 

LIVESTOCK CALLS

CATTLE: Steady-weaker

HOGS: Steady-mixed

CATTLE: February live cattle futures are heading for a second consecutive weekly decline amid signs cash market strength is leveling off. Cash cattle trade was relatively active around $140 in the Southern Plains yesterday. While that would be steady to last week’s average, it took trade in the $142 to $143 range in some areas last week to attain that level. This week, cash prices appear headed for a drop of $1 to $2 from last week. February live cattle fell 87.5 cents yesterday to $137.80, the lowest closing price since $137.70 on Nov. 19. Choice cutout values rose 44 cents yesterday to $264.55, up from an eight-month low earlier this week.

HOGS: February lean hogs are poised to close lower for a second straight week even as cash fundamentals appear to be stabilizing. The CME lean hog index is up 12 cents today, it’s fifth gain in the last seven days. But pork cutout values declined $3.48 yesterday, led by a drop of over $15 in hams. The cash index and pork cutout value likely must strengthen at the same time before traders conclude a seasonal low is in place. February lean hog futures surged $1.775 yesterday to $77.825, still down from $81.50 at the end of last week

 

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