Ahead of the Open | December 22, 2023
GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: Winter wheat 1 to 3 cents higher; HRS3 to 5 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the upside overnight with each firming into the break, as each saw little volatility overnight. Outside markets were supportive overnight, as front-month crude oil futures favored the upside and traded near recent highs and the U.S. dollar index favored the downside, currently trading around 400 points lower. Core PCE, the Federal Reserve’s preferred inflation gauge, was released this morning and came in below expectations of .2%, rising .1% month-over-month, while the annual rate dropped to 3.2%, the lowest since mid-2021, further adding to the dovish case laid out last week by the Fed.
Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, Dec. 25 for Christmas, so there will be no Pro Farmer reports that day. Grain and livestock markets resume trading at 8:30 a.m. CT on Tuesday, Dec. 26. Pro Farmer wishes you a blessed Christmas!
Washington is reportedly mulling striking the Houthi base in Yemen, just days after announcing a multinational task force to safeguard navigation in the Red Sea. But the pledge did little to deter the Houthis, who instead vowed to ramp up their attacks and target U.S. warships if Washington executed attacks in Yemen. Washington currently has at least three destroyers stationed by the Red Sea. “Even if America succeeds in mobilizing the entire world, our military operations will not stop unless the genocide crimes in Gaza stop and allow food, medicine, and fuel to enter its besieged population, no matter the sacrifices it costs us,” Mohammed al-Bukaiti, a senior Houthi official, posted on X.
Five of China’s largest state banks lowered interest rates on some deposits on Friday, the third round of such cuts this year, offering the prospect of reduced lending costs at a time when the government is urging banks to support the economy. Industrial and Commercial Bank of China, Agricultural Bank of China and China Construction Bank were among banks to cut rates for time deposits by as much as 25 basis points.
CORN: March corn futures saw muted volatility overnight, mildly favoring the upside. Initial resistance comes in at $4.73 1/2, which capped gains overnight, with additional backing from $4.76 1/2. Meanwhile, support stands at $4.70 1/2 then the contract low of $4.68 1/4.
SOYBEANS: March soybean futures saw corrective buying overnight following three consecutive days of steady selling. Support stands at the psychological $13.00 mark with backing from $12.95 3/4, then $12.82 1/2. Resistance comes in at $13.14, then the 10-day moving average at $13.22.
WHEAT: March SRW futures continue in an apparent bull flag on the daily bar chart. Yesterday’s range was the tightest in months despite large daily swings over the past couple of weeks, pointing to a potential holiday lull of sideways price action. Support lies at $6.09 then $6.02 1/2, while resistance stands at $6.16 then $6.25.
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly firmer tone, though choppy sideways trade that has overtaken the market this week could continue into this afternoon’s Cattle on Feed Report. Cash cattle trade has worked higher as the week went on, with this week’s average of $170.07 above last week's $168.71. Head counts are up from normal, especially for a report week, indicating that packers were indeed likely short bought on slaughter needs. Wholesale beef prices were mixed on Thursday and have traded sideways for most of this week. Choice rose $2.00 to $291.13 and Select dropped 33 cents to $261.27.
HOGS: Lean hog futures are expected to open with a mostly weaker tone, as prices continue to build a bull flag on the daily bar chart. Futures have been consolidating all week following late last week’s surge higher. The CME lean hog index, which rose 15 cents to $66.69 today (as of Dec. 20), is likely to lend strength to futures on extended price gains, considering today marks the first back-to-back gains since early November. Traders are likely to be hesitant in believing a seasonal low in place, which is likely to keep pressure on futures. This afternoon’s USDA Hogs & Pigs Report will give an inside look to supply side fundamentals after the close. Wholesale pork prices fell a penny to $81.35 Thursday, with a big drop in picnics offset by mild gains in loins and butts.
