Ahead of the Open | December 3, 2021
GRAIN CALLS
Corn: 4 to 5 cents higher.
Soybeans: 15 to 16 cents higher.
Wheat: Steady to 7 cents lower.
GENERAL COMMENTS: Winter wheat futures fell overnight under profit-taking pressure, heading for the first weekly loss in four weeks. Soybeans climbed amid hopes for fresh export demand and corn also rose. Malaysian palm oil fell to a four-week low, while Nymex crude oil rose more than $2 after hitting three-month lows yesterday. The U.S. dollar index is slightly firmer this morning.
USDA reported a daily sale of 122,000 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year. Today’s announcement follows three previous daily soybean sales this week, totaling 426,000 MT, to China or unknown destinations.
U.S. jobs growth was sharply weaker than expected during November. The Labor Department reported non-farm payrolls rose 210,000 last month, though the unemployment rate fell to 4.2% from 4.6% as the labor force participation rate increased to 61.8%, its highest level since March 2020. Economists expected non-farm payroll growth around 573,000.
The Biden administration plans to propose within days the amount of biofuels oil refiners must blend into their fuel mix this year and next year, Reuters and Bloomberg reported Thursday. The proposals were still listed as under review at the Office of Management and Budget yesterday. President Joe Biden's administration has delayed decisions on 2021 blending obligations by more than a year, and it missed a deadline to finalize 2022 obligations earlier this week.
China's soybean imports from the U.S. in 2021-22 are expected to fall sharply from last season after loading delays following Hurricane Ida. An early 2022 Brazil soy crop also shortened the U.S. export window to China, the world's top soybean buyer. China's total imports of U.S. soybeans for the marketing year that started on Sept. 1 may drop by at least 20% to less than 30 MMT, according to analysts and top importers.
Argentine farmers will plant an estimated 7.3 million hectares of corn in the 2021-22 season, the Buenos Aires Grains Exchange said yesterday, increasing its forecast from a previous estimate of 7.1 million hectares. Argentina's 2021-22 corn crop harvest is expected to reach a record 55 MMT, unchanged from the exchange’s previous estimate.
Statistics Canada estimated the Canadian all-wheat crop at 21.6 MMT, down 100,000 MT from its September forecasts, but 400,000 MT larger than traders expected. Canadian wheat production fell 38.5% from last year amid drought in the Prairies.
CORN: March corn futures overnight rose as high as $5.82 1/2 but are poised to end lower on the week after settling last Friday at $5.91 3/4. Further weakness in wheat prices may limit corn gains.
SOYBEANS: January soybeans overnight reached $12.61 3/4 and are heading for a weekly gain after settling last Friday at $12.52 3/4. A pick-up in export sales this week are supporting the market, though favorable South American growing conditions may limit upside.
WHEAT: March SRW wheat futures fell as low as $8.09 overnight and are down from $8.40 1/4 at the end of last week. Spring wheat futures posted double-digit losses overnight to lead the decline.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-firm
CATTLE: Live cattle futures may find support from stronger beef demand but are still heading for their first weekly decline in the past three. USDA yesterday reported a live steer average of $137.87, down about 30 cents from last week’s average, though some packer bids reached $142.00 in the Southern Plains. Choice cutout values rose $1.80 yesterday to an average of $272.02, down from $280.01 at the end of last week, but movement was a strong 174 loads. February futures yesterday gained 97.5 cents to $139.575, down from $141.20 at the end of last week. Chart levels to watch in February live cattle include this week’s low at $137.35 and the 20-day moving average around $137.80.
HOGS: Futures are poised to end with a gain on the week behind a stronger wholesale market and signs of bottoming in the CME lean hog index. The index is up 59 cents today to $70.86, the second consecutive daily gain. The index has been on a nearly uninterrupted drop for two months so it’s unclear whether the market is establishing a low, but December futures’ $3.50 premium to the index suggests traders see a bottom soon. Resurgent wholesale pork prices could also lift futures. Carcass cutout values rose $5.72 yesterday to an average of $88.09, up from $83.98 at the end of last week. Movement was a relatively strong 380.47 loads. February lean hogs closed yesterday at $82.00, up from $81.025 last Friday. Market bulls and bears are on a level near-term technical playing field. Upside price objectives include closing February futures above solid resistance at the November high of $84.675.
