Ahead of the Open | December 13, 2021
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 6 to 8 cents lower.
Wheat: 4 to 10 cents lower.
GENERAL COMMENTS: Spring wheat futures led losses overnight. Winter wheat futures extended last week’s declines, while corn and soybeans also slipped. Malaysian palm oil and Nymex crude oil are both posting small declines, while the U.S. dollar index is around 200 points higher this morning.
About 96% of Brazil’s 2021-22 soybean crop has been planted, according to AgRural. In southern Brazil, dry weather has delayed planting, threatening overall crop prospects. In some parts of Rio Grande do Sul, farmers had to replant soybeans because dryness hurt germination, AgRural said. In Paraná, farmers need rain “immediately” or fields in the west of that state will suffer.
Large speculators slightly increased their bullish bets in corn and soybeans as prices rose in early December. Managed funds increased their net long position in CBOT corn futures and options to 332,501 contracts as of Dec. 7, up 17,232 from a week earlier, based on data from the U.S. Commodity Futures Trading Commission. In SRW futures, managed funds’ net long fell to 721 contracts, the lowest since a net short in late October.
Russian wheat prices fell for the second consecutive week last week. Russian wheat with 12.5% protein loading from Black Sea ports for shipment in late December or early January was quoted at $334 per MT free on board (FOB) at the end of last week, down $3 from the previous week, the IKAR consultancy said. Sovecon, another consultancy, pegged wheat prices down $2 to $338 per MT.
Algeria tendered to buy a nominal 50,000 MT of optional origin milling wheat, though it often purchases more than the tendered amount. Jordan tendered to buy 120,000 MT of optional origin milling wheat.
CORN: March corn futures traded in a narrow range overnight after settling last Friday at $5.90, up 6 cents for the week. Strong domestic ethanol demand and signs of improving exports may keep prices supported this week.
SOYBEANS: January soybeans fell as low as $12.57 1/2 overnight after ending last week at $12.67 3/4, the highest closing price since $12.73 on Nov. 23. USDA’s Supply and Demand Report data last week was close to trade expectations, keeping traders focused on exports and South America weather.
WHEAT: March SRW wheat futures overnight fell as low as $7.76, after ending last week at $7.85 1/4, down 17 1/2 cents for the week and the second straight weekly decline. The larger global supply outlook conveyed in USDA’s Supply and Demand Report last week may keep prices under pressure.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firm
CATTLE: Live cattle futures may extend last week’s declines on signs the cash market has put in a short-term top after a two-month rally. Packers pulled back on cash bids last week, and with holiday slaughter schedules for the two weeks after this, it’s unlikely they will raise bids. If the wholesale beef market can’t find a bottom, funds may more actively liquidate long positions in cattle futures. Live steers averaged $139.75 as of last Friday, down from the previous week’s average of $140.44 and heading for the first weekly drop in 10 weeks. Choice cutout values ended last week at an average of $264.54, down from the previous week's average of $275.14. February live cattle futures ended last week at $138.075, down 87.5 cents for the week.
HOGS: Lean hogs may extend last week’s gains on indications cash fundamentals are forming a seasonal low. The CME lean hog index is up 63 cents today, a relatively small gain but still the biggest advance since the cash market first showed signs of bottoming in late November. The cash index has gained six out of the past eight days. Pork cutout values ended last week at an average of $86.19, up 5.9% from $81.37 at the end of the previous week and the first gain in 10 weeks. Meatpackers slaughtered an estimated 2.601 million head of hogs last week, down 56,000 from the previous week and down 154,000, or 5.6%, from the same week in 2020. February lean hogs rose $3.20 last Friday to $81.025, up 47.5 cents for the week.
