Ahead of the Open | December 17, 2021
GRAIN CALLS
Corn: 1 to 2 cents lower.
Soybeans: Steady to 1 cent lower.
Wheat: Steady to 4 cents higher.
GENERAL COMMENTS: Soybean futures climbed to a four-week high overnight before trimming gains at the end of the session, while corn weakened and winter wheat rose modestly. Malaysian palm oil rose slightly today but fell over 8.0% on the week. Nymex crude oil is down more than $1 this morning, while the U.S. dollar index is more than 100 points higher.
USDA reported daily sales of 132,000 MT of soybeans for delivery to China and 33,000 MT of soybean oil to Indian, both during the 2021-22 marketing year
Argentina's Buenos Aires Grain Exchange may raise its estimate for the country’s 2021-22 wheat harvest, which is already at a record 21 MMT, due to high yields as harvest progresses. The exchange said farmers have harvested 65% of 6.6 million hectares.
Ukraine exported 29.2 MMT of grain as of Dec. 17, according to ag ministry data, up 22.2% from the same period last year. The total included 15.3 MMT of wheat, 5.1 MMT of barley and 8.4 MMT of corn. Ukraine’s ag ministry expects the country to export 62.4 MMT of grain in 2021-22.
Sen. Chuck Grassley (R-Iowa) asked the Justice Department (DOJ) to look into why fertilizer prices have increased so much this year. In a letter to Attorney General Merrick Garland, Grassley noted that two companies control the potash supply for farmers and four companies control three-quarters of the nitrogen market.
Euro zone consumer prices surged 4.9% in November, the highest rate on record, Eurostat confirmed on Friday, with more than half of the increase due to a spike in energy prices.
Taiwan tendered to buy 110,000 MT of U.S. milling wheat.
CORN: March corn futures fell as low as $5.89 1/4 overnight. A push above this week’s high at $5.96 1/2 and the November high 1/4 cent above that may spark a test of stiff resistance around $6.00. Support is seen around this week’s low at $5.81 1/2.
SOYBEANS: January soybeans overnight rose to $12.84 3/4, the highest intraday price since $12.87 1/4 on Nov. 18, before fading. The lead contract is on track to post a third-straight weekly gain after ending last week at $12.67 3/4, and is in a five-week uptrend on the daily bar chart. Solid resistance is seen at the November high of $12.89 1/4.
WHEAT: March SRW futures climbed to $7.75 3/4 overnight but are still heading for a third consecutive weekly decline after ending last week at $7.85 1/4. Adverse weather in the U.S. Plains has raised concern over the HRW crop, but U.S. wheat remains uncompetitive on global markets.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firm
CATTLE: Live cattle futures are poised for a third straight weekly decline on slipping cash prices. Live steers averaged $137.17 so far this week, down from last week’s average of $139.69 and the second weekly drop in a row. Packers have holiday-shortened schedules the next two weeks and likely won’t be bidding aggressively. Feedlots haven’t sold all of this week’s showlist, but they appear to be in no hurry to move animals at the lower prices. Futures weakness may be limited by a rebound in wholesale beef, which suggests prices may have dropped far enough to spur retail buying. Choice cutout values rose $2.71 yesterday to $262.97 on movement of 140 loads. February live cattle rose 47.5 cents to $137.05 on Thursday, after earlier dropping to $135.80, the contract’s lowest intraday price since Nov. 15.
HOGS: Lean hog futures may extend yesterday’s gains on further signs of strengthening cash. The CME lean hog index is up another 11 cents to $72.41, the highest since Nov. 24. Wholesale pork is also strengthening, with cutout values up $3.66 yesterday to $91.49, the highest daily average since Nov. 15. Gains were led by hams, which jumped over $10. Movement totaled about 327 loads. While the lean hog index is signaling a seasonal low, cash gains are being outpaced by futures, which could lead to some corrective selling in futures to close the week if early followthrough buying is limited. February lean hogs rose $1.025 yesterday to $80.35, down from $81.025 at the end of last week.
Brazilian pork and poultry processors are expected to end the year with record high production and exports, while the industry is also poised to perform well in 2022 due to strong global and local demand for meat products. According to projections released yesterday by industry association ABPA, Brazil's overall pork and poultry production and export volumes will rise at the end of the year and into the next. Sales of pork products to China, which buys about 50% of Brazil's exports of that meat, should remain strong even as it raises import tariffs next year, Ricardo Santin, head of ABPA, said.
