Ahead of the Open | December 2, 2021
GRAIN CALLS
Corn: 6 to 7 cents higher.
Soybeans: 5 to 7 cents higher.
Wheat: 8 to 15 cents higher.
GENERAL COMMENTS: Corn, soybean and wheat futures extended Wednesday’s corrective gains overnight. Malaysian palm oil fell slightly, while Nymex crude oil declined more than $1. The U.S. dollar index is slightly weaker this morning.
U.S. net farm income is forecast to reach $116.8 billion in 2021, up $22.0 billion (23.2%) from 2020 with the 2020 result up $15.7 billion (19.9%) from 2019, according to the Farm Sector Income Forecast from USDA’s Economic Research Service (ERS). Net cash farm income is forecast to increase and reach $133.0 billion in 2021, up $17.0 billion (14.7%) from 2020, ERS said.
The food price index from the UN Food and Agriculture Organization (FAO) climbed another 1.2% in November and was 27.3% above year. This marked the fourth consecutive monthly rise in the index, pushing it to the highest level since June 2011.
USDA, in its monthly Fats and Oil report yesterday, said U.S. processors crushed 5.91 million short tons (196.9 million bu.) of soybeans during October, up 20% from September, up 0.2% from October 2020 and a record for any month. The latest figure surpassed trade expectations for October crushings around 5.868 short tons, based on a Reuters survey. Soyoil stocks totaled 2.386 billion pounds, moderately higher than expectations of 2.340 billion.
CORN: USDA reported net U.S. corn sales for the week ended Nov. 25 totaled 1.02 MMT, down 29% from the previous week and down 12% from the average for the previous four weeks. Exports of 938,400 MT were up 1% from the previous week and up 5% from the four-week average. March corn futures overnight rose as high as $5.79 1/2 and are poised to gain for a second day after posting a three-week closing low Nov. 29.
SOYBEANS: Net weekly U.S. soybean sales totaled 1.063 MMT, down 32% from the previous week and down 29% from the four-week average, with China a top buyer at 657,100 MT, including 462,000 MT switched from “unknown destinations.” The sales were at the low end of expectations ranging from 800,000 MT to 1.8 MMT.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weak
CATTLE: Live cattle futures posted in a modest corrective bounce yesterday but may struggle to extend gains amid signs of a top in cash markets. Light cash trading was reported so far this week, with live steers in top feedlot areas yesterday averaging $137.84, down slightly from last week’s average of $138.17, a 4 1/2-year high. Many feedlots passed on meatpackers’ steady $138 bids in hopes of higher prices later this week, but packers may be disinclined to pay up, having bought aggressively last month and with fresh contract supplies available this month. Also, wholesale beef remains under pressure, a sign of poor demand. Choice cutout values fell $1.46 yesterday to an average of $270.22, extending the market’s slide to four-month lows. Net weekly U.S. beef sales totaled 21,600 MT, up 12% from the previous week and up 5% from the four-week average.
Chart levels to watch in February live cattle include yesterday’s low at $137.35 and the 20-day moving average at $137.65.
HOGS: Lean hog futures may extend the past week’s decline on weak technical and a slumping wholesale market. Pork cutout values yesterday fell $4.33 to an average of $82.37, the lowest since Feb. 3. Movement totaled nearly 358 loads, down from stronger levels earlier this week and indicating processors are trimming prices to move product. Today’s CME Lean Hog Index is up 23 cents to $70.27, up from a 10-month low previously and $3.355 under December futures. Slaughter so far this week was an estimated 1.443 million head, up 17,000 from the same period during last week’s holiday-shortened schedule. Net weekly U.S. pork sales totaled 41,400 MT, up 48% from the prior four-week average.
