Ahead of the Open | December 31, 2021
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 2 to 4 cents higher.
Wheat: SRW 2 to 4 cents lower, HRW and spring wheat steady to 5 cents higher.
GENERAL COMMENTS: Corn and wheat futures were mixed and soybean futures were slightly firmer in light, narrow-range trade overnight on the final trading day of the year. Malaysian palm oil was up slightly, while crude oil was down over $1.00. U.S. stock index futures and the U.S. dollar index are slightly weaker this morning.
Grain and livestock markets will trade normal hours today, but government offices are closed for the New Year’s holiday.
Today marks the start of the delivery process for January soy futures. CME Group reported deliveries of 244 contracts against January soybeans, no deliveries against January soymeal and 36 deliveries against January soyoil.
China’s sow herd at the end of November was 4.7% higher than the previous year at 42.96 million head, the country’s ag ministry reported, though down 1.2% from October. China slaughtered 235.9 million hogs in the first 11 months of 2021, up 66.1% from the same period the previous year, amid rapid expansion of the hog herd after the African swine fever outbreak. Rising output and oversupply have caused pork prices to plunge this year and pushed hog margins to negative territory.
CORN: March corn futures fell as low as $5.94 3/4 overnight and are poised to end with a weekly decline for the first week in the past four. March’s overnight lows put prices just above the 20-day moving average and a trendline drawn from the October low. Breaking below key support levels may trigger fund selling today.
SOYBEANS: March soybeans rose as high as $13.45 overnight and are hovering around last week’s close at $13.40 3/4. Support is seen around the 10-day moving average at $13.35 3/4.
WHEAT: March SRW wheat fell as low as $7.75 overnight and are down from last week’s close at $8.14 3/4.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weak
CATTLE: February live cattle are poised to end the week higher after closing last week at $139.625, boosted by renewed strength in cash cattle markets and firmness in wholesale beef. Live steers as of yesterday averaged $139.88, up from last week’s average of $135.64 and heading for the first weekly gain after three weeks of declines. Packers have boosted bids in an effort to rebuild slaughter supplies for next week’s full schedule after two holiday weeks. Cash sources signal this week’s average price could top the $140.44 mark posted the first week of December, as prices were as high at $142.50 in some locations yesterday. Choice cutout values fell 45 cents yesterday to $265.26, down from a three-week high the previous day. Select values rose $1.14 to $258.23. Movement totaled 102 loads.
February live cattle yesterday fell 75 cents to $139.975, down from the four-week high of $141.425 reached yesterday. A push above yesterday’s high may have bulls targeting the contract high of $141.85 posted Nov. 29. December live cattle, which expires today, fell 35 cents to $139.05, ended Dec. 29 at $139.40, the highest settlement for a nearby contract since March 2016.
HOGS: February lean hogs are on track to close lower for the week after ending last week at $83.225 but may find support from wholesale market strength. Pork cutout values jumped $7.06 yesterday to an average of $91.35, the highest daily reading in a week and led by a gain of over $18 in primal loins. Movement totaled nearly 364 loads. But the next CME lean hog index expected to fall 45 cents to $71.75, which followed two straight days of gains. Also, February futures hold an unusually high near-$11 premium above the cash index, which may limit buying interest in futures. Chart levels to watch include a four-week high of $84.65 reached Dec. 27.
