Ahead of the Open | December 14, 2021

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GRAIN CALLS

Corn: 1 to 2 cents lower.

Soybeans: 2 to 4 cents higher.

Wheat: 1 to 5 cents lower.

GENERAL COMMENTS: Corn futures fell to the lowest levels in a week overnight on expectations rain in South America will at least temporarily ease dry conditions, while soybeans rebounded from earlier weakness and pushed higher. Wheat futures also fell. Malaysian palm oil dropped to the lowest levels in over a week, while Nymex crude oil and the U.S. dollar index both fell slightly.

Dry weather in southern Brazil continues to take a toll on the country’s first corn crop as it pollinates, according to Crop Consultant Dr. Michael Cordonnier, who cut his forecast for Brazil’s corn production by 1 MMT to 116 MMT. Rio Grande do Sul has been impacted most, but yield losses are also expected in Parana, Santa Catarina and Sao Paulo.

Cordonnier kept his Brazilian soybean crop estimate unchanged at 144 MMT, noting the crop in southern Brazil “could still recuperate” with timely rains. He also left his Argentine crop estimates unchanged at 50 MMT for soybeans and 53 MMT for corn after weekend rains were more widespread than expected across the country.

Rains totaling 15 to 30 millimeters fell in Brazil’s Mato Grasso do Sul over the past day, with similar amounts in neighboring Paraguay, according to World Weather Inc.

Egypt and Russia have discussed establishing a joint grains trading company in Egypt, according to Egyptian supply minister Ali Moselhy. The two countries also discussed the establishment of a logistic-free zone to store wheat in Egypt with an initial capacity of 1 MMT per year.

An importer group in the Philippines tendered to purchase up to 220,000 MT of feed wheat, Reuters reported, citing European traders. The tender was the second issued by the Philippines today, with a separate tender issued by another group for 120,000 MT of feed wheat from the U.S., Australia, Canada, Europe or the Black Sea region.

Iran tendered to buy around 180,000 MT of milling wheat. Japan is seeking 228,783 MT of U.S. and Canadian wheat in its weekly tender.

 

CORN: March corn overnight fell as low as $5.81 1/2, the lowest intraday price since $5.78 1/2 on Dec. 7. Prices remain in a two-month uptrend and market bulls hold an overall near-term advantage, with the next upside objective closing March futures above solid resistance at the November high of $5.96 3/4. First resistance is seen at yesterday’s high of $5.90 1/4.

SOYBEANS: January soybeans overnight fell as low as $12.37 1/2, the lowest intraday price since $12.21 on Dec. 2, while January soyoil dropped to a six-month low. Market bears have a near-term technical advantage amid choppy trading recently. Bears’ downside objectives include closing January futures below solid support at $12.00.

WHEAT: Winter wheat futures traded within yesterday’s ranges overnight. Market bulls hold a near-term technical advantage in SRW futures with prices still in an uptrend drawn from the July low and the March contract bouncing back from six-week lows posted late last week. Upside price objectives include closing March futures above solid resistance at $8.25.

 

LIVESTOCK CALLS

CATTLE: Steady-weak

HOGS: Steady-firm

CATTLE: Followthrough from yesterday’s late upturn in live cattle futures may be limited by signs a two-month rally in cash prices has topped out. Packers will have abbreviated holiday schedules during the last two weeks of this month and are unlikely to bid as aggressively as they did in recent weeks, meaning cash prices likely will soften through the end of the year. Also, wholesale beef remains under pressure as high retail prices crimp demand. Choice cutout values yesterday fell $1.32 to $263.22, the lowest daily average since April 6. Last week’s average live steer price fell 75 cents from the previous week, the first weekly decline in the past 10, to an average of $139.69.

HOGS: The CME lean hog index is up another 60 cents today, the seventh gain in the past nine days and further indication the cash market has established a seasonal low. February lean hog futures, which take over lead-month status later today, ended yesterday at an $8.57 premium to today’s cash index quote. Pork carcass cutout values rose 84 cents yesterday to $87.03, led by strength in loins. Average cutout values jumped 5.9% last week for the first weekly gain in the past 10.

 

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