Ahead of the Open | December 8, 2021
GRAIN CALLS
Corn: 2 to 3 cents lower.
Soybeans: 9 to 12 cents lower.
Wheat: 1 to 8 cents lower.
GENERAL COMMENTS: Soyoil futures led the soy complex lower overnight on concern over weaker demand after the Biden administration proposed cuts to biofuel blending mandates. Corn and wheat fell on spillover pressure. Nymex crude oil rose modestly, while the U.S. dollar index is down around 275 points this morning.
USDA reported a daily sale of 1.844 MMT corn for delivery to Mexico, including 1.09 MMT for delivery during the 2021-22 marketing year and 754,380 MT is for the 2022-23 marketing year. That is the fifth largest daily corn sales figure to any country and the largest daily corn sales ever to Mexico.
USDA also announced a daily sale of 130,000 MT of soybeans for delivery to China during the 2021-22. Today’s announcement follows six daily soybean sales over past week totaling 801,000 MT for delivery to China or unknown destinations during the 2021-22 marketing year.
The Biden administration proposed scaling back the amount of biofuels U.S. oil refiners were required to blend since the onset of the Covid-19 pandemic. The decision was intended to provide relief to the U.S. refining industry after the health crisis slammed domestic demand for transport fuels. But the proposal drew criticism from both the oil industry, which claimed the measures were not enough, and the biofuels sector, which said the retroactive move to cut blending volume mandates would hurt farmers.
FranceAgriMer lowered its 2021-22 French wheat export forecast for outside the European Union to 9.2 MMT, down 200,000 MT from last month. At that level, French wheat exports would still be up 24% from the previous year. The French farm office kept its wheat export forecast within the 27-member bloc at 7.8 MMT. Projected 2021-22 French wheat ending stocks were revised up 300,000 MT to 3.5 MMT.
South Korea purchased 100,000 MT of milling wheat – 50,000 MT each from the U.S. and Australia. Japan tendered to buy 80,000 MT of feed wheat and 100,000 MT of feed barley.
CORN: USDA’s Supply and Demand Report tomorrow is expected to show small changes to U.S. and global ending stocks projections. U.S. corn ending stocks may be lowered about 6 million bu. to 1.487 billion bu., based on a Reuters survey of analysts. Ending global corn supplies may be increased to 304.47 MMT from 304.42 MMT.
SOYBEANS: January soybeans overnight fell to a low for the week at $12.38 1/4 while January soyoil sank about 3.0%, also hitting lows for the week. Soyoil’s weakness suggested disappointment with the proposed U.S. biofuels blending cuts, as expectations for greater biofuels demand helped drive the market higher much of this year. USDA is expected to raise its U.S. soybean ending stocks projection for 2021-22 to 352 million bu. from 340 million bu. last month, based on the Reuters survey.
WHEAT: USDA is expected to raise its 2021-22 U.S. ending wheat stocks estimate to 589 million bu. from 583 million bu. Ending global stocks are expected to be up around 0.2% to 276.3 MMT.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weak
CATTLE: Cash cattle prices may level off this week following a two-month rally, with showlist numbers up and packers likely pulling back from their aggressive bidding in recent weeks. Cash prices are expected to be about steady with last week’s average of $140.44, though trade isn’t likely until late in the week. Concerns high beef prices are suppressing demand may weigh on futures, reflected in continued pressure on the wholesale market. Choice cutout values fell $4.50 yesterday to $268.03, the lowest daily average since late July. Movement totaled 159 loads, USDA reported. Wholesale beef prices are expected to remain under pressure through the end of the year. February live cattle futures fell 42.5 cents yesterday to $139.225, near the middle of this week’s range.
HOGS: Lean hog futures tumbled to six-week lows yesterday as traders removed premium from the market, though selling pressure may abate soon with the CME lean hog index showing signs of stabilizing and establishing a seasonal low. The CME index is up 16 cents today and has gained four of the past five days, signaling a potential bottom. Wholesale pork rose modestly yesterday and may climb further this week as grocers complete ham purchases for Christmas. February lean hog futures plunged $1.675 to $76.55, the contract’s lowest closing price since $74.325 on Oct. 27.
