Ahead of the Open | December 29, 2021
GRAIN CALLS
Corn: 3 to 6 cents lower.
Soybeans: 8 to 10 cents lower.
Wheat: Steady to 6 cents lower.
GENERAL COMMENTS: Corn, soybean and wheat futures showed followthrough selling overnight, with spring wheat futures dropping to an eight-week low, as grain markets extended yesterday’s liquidation trade. Malaysian palm oil was up slightly while Nymex crude oil was down from one-month highs reached yesterday. U.S. stock index futures and the U.S. dollar index are slightly weaker this morning.
La Nina is expected to slowly weaken in January, but its influence on South American weather will likely continue without much change over the next few weeks, according to World Weather Inc. “Concern over below-average precipitation and potential cuts in yield will continue in parts of Argentina, Paraguay, Uruguay and southern Brazil,” the forecaster said. February may bring change in the pattern, possibly a northward shift in heat and dryness.
Argentina will see sporadic rainfall of mostly light intensity the next week to 10 days, offering some temporary relief to recent drying, “but crop conditions will further deteriorate in the driest areas, raising the need for immediate rain of significance,” World Weather said. “Weather patterns will not likely improve much Jan. 5-11 and there is still strong potential that portions of the north and east will continue to receive lighter-than-usual rainfall and experience warm-biased temperatures through the entire month of January.”
Since July 1, Ukraine has exported 31.6 MMT of grain, up 21.1% from the first half of the 2020-21 marketing year. That total included 15.7 MMT of wheat, 10.3 MMT of corn and 5.2 MMT of barley. The country’s ag ministry previously said it expects to export 24.5 MMT of wheat, 30.9 MMT of corn and 5.2 MMT of barley in 2021-22.
Egypt tendered to purchase an unspecified amount of wheat from multiple origins; results are expected later today. No U.S. wheat was offered in the Egyptian tender. Jordan purchased 60,000 MT of optional origin milling wheat.
CORN: March corn futures extended a decline from the 6 1/2-month high reached yesterday, falling overnight as low as 5.99 1/2, a one-week low. Support is seen around the 10- and 20-day moving averages at 5.98 3/4 and $5.91 1/2, respectively.
SOYBEANS: March soybean futures overnight extended a decline from a five-month high yesterday, falling as low as $13.55. Market bulls still hold a near-term technical advantage with prices are in a seven-week uptrend. Support is seen at $13.50.
WHEAT: March spring wheat fell as low as $9.93 3/4, the lowest intraday price since $9.91 1/4 on Nov. 8. March SRW futures fell as low as $7.75 1/4, the lowest since Dec. 21.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE: Quiet trade is expected in live cattle futures as traders await direction from the cash market. A few asking prices surfaced at roughly $2 above last week’s trade, but packers have yet to establish bids. The slow development of cash negotiations suggests cash trade will be pushed late into the week, though there could be some urgency to accelerate the process today. Recent strength in wholesale beef prices may also support futures, indicating retailers are stepping up purchases for January promotions. Choice cutout values rose $1.54 yesterday to an average of $264.48, the highest since Dec. 10. Movement totaled 112 loads.
HOGS: Lean hog futures may find support from firmer wholesale pork and a rebound in the CME lean hog index. The next index is up 66 cents to $71.82, breaking a string of three straight declines. Pork cutout values rose 56 cents yesterday to $86.89, despite declines in bellies and hams. Movement was strong for a second straight day after the Christmas weekend at 340.94 loads. February lean hog futures fell $1.025 yesterday to $82.625.
