Ahead of the Open | December 23, 2021
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 3 to 5 cents lower.
Wheat: HRW and SRW 1 to 5 cents lower, spring wheat steady to 3 cents higher.
GENERAL COMMENTS: Soybean futures retreated from four-month highs reached earlier in overnight trade, while corn finished steady to weaker overnight and wheat was mixed. Malaysian palm oil and Nymex crude oil rose modestly. The U.S. dollar index is slightly firmer this morning.
Grain and livestock markets will observe normal trading hours today but are closed on Friday for the Christmas holiday.
USDA will release its monthly Cattle on Feed and quarterly Hogs & Pigs reports at 2 p.m. CT. The Cattle on Feed Report is expected to show feedlot placements rose 3.2% in November compared with the same month in 2020. Compared to pre-Covid November 2019, last month’s projected placements would be down 6.2%. Dec. 1 feedlot inventories are expected to be unchanged from year-ago levels.
The Hogs and Pigs Report is expected to reflect continued herd contraction. The hog herd as of Dec. 1 is expected to be down 2.9% from year-ago, based on a Reuters survey of analysts. Hogs kept for marketing likely fell 3.1% year-over-year and hogs kept for breeding rose 0.1%, based on the survey.
Ukraine has enough wheat to ensure domestic food needs and there’s no need to limit exports, the country’s grain traders association said. The Ukrainian government will reportedly decide whether to limit milling wheat exports in mid-January. “There are no grounds for possible restrictions on wheat exports,” the association said, noting shipments usually slow during the second half of the marketing year.
Taiwan purchased 110,000 MT of U.S. milling wheat. Iran bought 300,000 MT of corn, likely to be sourced from Brazil, and 240,000 MT of soymeal, likely to be sourced from Brazil or Argentina. In a separate tender, Iran purchased 240,000 MT of milling wheat from unspecified origins. Algeria is thought to have bought between 200,000 and 250,000 MT of Canadian durum wheat, though some could be Mexican origin
CORN: USDA reported net U.S. corn sales of 982,900 MT for the week ended Dec. 16, down 50% from the previous week and down 29% from the average for the previous four weeks. Sales were within trade expectations ranging from 725,000 MT to 1.4 MMT. March corn overnight fell as low as $6.00 1/2 after rising yesterday to $6.06 3/4, the contract’s highest intraday price since $6.16 1/2 on July 1.
SOYBEANS: Net weekly U.S. soybean sales fell to a marketing-year low at 811,500 MT, down 38% from the previous week and down 42% from the prior four-week average. China was the lead buyer at 730,400 MT, including 330,000 MT switched from unknown destinations and decreases of 3,300 MT. Sales were within expectations ranging from 700,000 MT to 1.7 MMT. March soybeans faded to losses overnight after rising earlier to $13.40 1/2, the most-active contract’s highest intraday price since $13.41 3/4 on Aug. 30.
WHEAT: Net weekly U.S. wheat sales totaled 425,400 MT, down 35% from the previous week but up 11% from the four-week average. Japan was a prominent buyer, at 130,500 MT, along with the Philippines, at 105,500 MT. Sales were at the high end of expectations ranging from 200,000 to 550,000 MT. March SRW wheat overnight reached $8.20 1/2, the contract’s highest intraday price since $8.22 3/4 on Dec. 3, before fading.
LIVESTOCK CALLS
CATTLE: Mixed-weaker
HOGS: Steady-mixed
CATTLE: Live cattle may find support from reports packers yesterday raised cash cattle bids from early-week levels in the northern market, signaling the recent drop in cash prices may be nearing an end. However, bids in the Southern Plains remained down around $2 from last week. A limited number of cattle have moved this week, suggesting the bulk of trade may wait until after this afternoon’s Cattle on Feed Report. A contra-seasonal rise in USDA-reported beef stocks in November may generate some corrective selling in cattle futures ahead of the holiday weekend. Net weekly U.S. beef sales totaled 12,000 MT, down 30% from the previous week and down 23% from the four-week average. Lead buyers included China at 3,800 MT and Japan at 3,700 MT.
Choice cutout values fell 99 cents yesterday to an average of $261.39, while Select fell 75 cents to $249.92. Movement totaled 116 loads. February live cattle rose 45 cents to $137.375, the highest closing price since Dec. 14.
HOGS: Lean hog futures may see some corrective selling pressure after surging sharply the past two sessions to four-week highs, which pushed February futures to an unusually high $10-plus premium to the CME lean hog index. USDA reported pork stocks fell less than normal in November, which may also pressure futures. Net weekly U.S. pork sales totaled 28,800 MT, down 8% from the previous week but up 5% from the prior four-week average. Pork cutout values fell 24 cents yesterday to an average of $84.67 on movement of 257 loads. February lean hog futures rose 92.5 cents yesterday to $83.35, the highest closing price since $84.25 on Nov. 24.
