Ahead of the Open | December 27, 2021
GRAIN CALLS
Corn: 4 to 7 cents higher.
Soybeans: 14 to 16 cents higher.
Wheat: Steady to 6 cents higher.
GENERAL COMMENTS: Corn futures climbed near six-month highs overnight and soybean reached the highest prices in over four months on concerns dry conditions will cut yield potential in South America. Winter wheat futures rose to four-week highs. Malaysian palm oil rose slightly and Nymex crude oil softened. The U.S. dollar index is slightly firmer this morning.
USDA reported a sale of 269,240 MT of corn for delivery to “unknown destinations” during the 2021-22 marketing year.
Southern Brazil and Argentina were dry over the Christmas weekend and dryness is expected to continue through Tuesday. Rain forecast for Southern Brazil during the middle of this week may provide some relief but won’t reverse deteriorating crop conditions, World Weather Inc. said. Western Argentina may receive rain late this week and over the weekend, with showers occurring periodically next week.
Russia’s wheat export tax for Dec. 29 to Jan. 11 will be $94.90 per MT, up from $94.00 a MT currently. The wheat export tax has surged 239% from the beginning of June when Russia first started using a sliding scale. Russian wheat with 12.5% protein loading from Black Sea ports for shipment in January was quoted at $330 a MT free on board (FOB) at the end of last week, up $1 from the previous week, IKAR said.
CORN: March corn futures overnight reached $6.14 3/4, the highest intraday price since $6.16 1/2 on July 1. The most-active contract rose 13 1/2 cents last week, its third straight weekly gain.
SOYBEANS: March soybeans overnight hit $13.57 1/2, the highest intraday price since $13.64 on Aug. 18, while March soymeal reached $405.40, the highest since May 12. March soybeans rose 52 1/4 cents last week for the contract’s fourth consecutive weekly gain.
WHEAT: March SRW wheat futures overnight reached $8.24, the highest intraday price since $8.24 1/4 on Nov. 30, while March HRW futures touched $8.71, the highest since Nov. 29.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firmer
CATTLE: Deferred live cattle futures may face pressure after USDA’s Cattle on Feed Report Dec. 23 showed higher than expected feedlot placements last month, but price direction this week should largely hinge on the cash market. Feedlots moved 1.971 million head of cattle on feed during November, up 3.6% from the same month in 2020. Feedlot placements were expected to rise 3.2%, based on a Reuters survey. Live steers ended last week at an average of $135.55, down for the third consecutive week. Choice cutout values ended last week at an average of $261.86, down from $263.01 at the end of the previous week. February live cattle ended last week at $139.625, the contract’s highest closing price since $139.65 on Dec. 6 and a gain of $3.20 for the week.
HOGS: Last Thursday’s Hogs & Pigs Report showed the U.S. hog herd 4.0% smaller than year-ago, a larger contraction than expected. Analysts expected a drop closer to 2.9%, based on a Reuters survey. Animals kept for breeding, an indicator of expansion, were little changed at 6.18 million head, compared to expectations for a 0.1% increase over year-ago levels. Futures may also draw support from strength in wholesale pork. Pork cutout values ended last week at an average of $91.47, up from $85.82 at the end of the previous week. February lean hogs ended last week at $83.225, up $2.425 for the week.
