GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: Steady to 3 cents lower.
Wheat: HRW and SRW futures steady to 4 cents lower; spring wheat steady to 1 cent higher.
GENERAL COMMENTS: Soybean futures climbed near a two-week high overnight before fading. Corn and wheat futures extended last week’s declines. Malaysian palm oil futures jumped nearly 4.0% to a two-week high on expectations for tighter supplies. Nymex crude oil rose more than $2 as the market extended a sharp rebound from last week’s selloff. The U.S. dollar index is around 200 points higher this morning.
USDA reported a daily sale of 123,000 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year. Today’s USDA announcement follows five daily sales over past week totaling 678,000 MT of soybeans for delivery to China or unknown destinations during the 2021-22 marketing year.
Dry weather is becoming more concerning in areas of Argentina and southern Brazil and forecasts call for hotter and drier conditions in the driest areas this month, Crop Consultant Dr. Michael Cordonnier said. He maintained his soybean and corn crop estimates this week, but now has a lower bias toward production potential in both countries. Cordonnier estimates Brazilian production at 144 MMT for soybeans and 117 MMT for corn. In Argentina, he pegs production at 50 MMT for soybeans and 53 MMT for corn.
France’s farm ministry estimated the country’s winter soft wheat area for the 2022 harvest at 4.92 million hectares, down from 4.96 million hectares the previous year. For winter durum wheat, farmers were expected to sow about 279,000 hectares, down from 284,000 hectares the previous year.
China imported 8.57 MMT of soybeans in November, up 68% from October as more cargoes arrived from the U.S, though that figure was down 10.6% from last year. During the first 11 months of this year, China imported 87.65 MMT of soybeans, down 5.5% from the same period last year.
CORN: March corn futures overnight rose as high as $5.87 1/4 before fading. The market may trade sideways ahead of Thursday’s USDA crop reports. USDA will not update its estimates for the U.S. corn crop, but may make modest changes to U.S. and global ending stocks projections.
SOYBEANS: January soybeans futures traded within yesterday’s ranges overnight. Yesterday, the lead contract rose as high as $12.74 3/4, the highest intraday price since $12.81 on Nov. 24, before slipping to losses. Recent export business and concerns over dry conditions in southern Brazil should limit selling.
WHEAT: Winter wheat futures saw a mild corrective setback overnight but should be underpinned by recent export business on global markets and ongoing concern over tight milling-quality supplies.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-mixed
CATTLE: Live cattle futures may extend yesterday’s gains behind strength in the cash market, though the upside may be limited as a slumping wholesale market illustrates retailer resistance to increasingly pricey beef. Last week’s average live steer price rose $2.27 to $140.44, the ninth consecutive weekly gain and the highest since at least June 2017. Choice cutout values fell $1.83 yesterday to $272.53 on movement of 116 loads. Values for cheaper primal cuts and grindings are holding up, but higher-end cuts face resistance from retail buyers struggling to move those products at record retail prices. Industry sources expect further pressure on wholesale beef prices through year-end. February live cattle rose 70 cents yesterday to $139.65, the contract’s highest settlement since Nov. 26. January feeder cattle rose $1.125 to $165.25.
HOGS: A firmer tone in wholesale pork and an uptick in the CME lean hog index may help lean hog futures find support after sinking near four-week lows yesterday. The CME lean hog index is up 25 cents to $70.78, still near a 10-month low hit Nov. 29, though modest gains over the past week suggest the market is establishing a seasonal low. Pork carcass cutout values rose $2.34 yesterday to an average of $83.71, up from a 10-month low Friday. Strong movement at nearly 400 loads indicated solid retailer demand. However, buying interest in futures will likely remain muted until traders are certain the cash and product markets have bottomed. February lean hog futures fell $3.275 yesterday to $78.225, the lowest closing price since $79.325 on Nov. 10. December hogs fell $1.95 to $72.05.
China’s meat imports fell 12.6% in November from a year earlier, customs data showed, as this year’s cheaper domestic pork cut demand for overseas supplies.