Ahead of the Open | December 9, 2021
GRAIN CALLS
Corn: 2 cents lower to 2 cents higher.
Soybeans: 7 to 9 cents lower.
Wheat: 6 to 14 cents lower.
GENERAL COMMENTS: Winter wheat futures fell to the lowest levels in a month overnight and corn and soybeans also weakened ahead of USDA’s monthly crop reports later this morning. Nymex crude oil is slightly lower after retreating from an earlier push near two-week highs. The U.S. dollar index is firmer.
USDA reported a daily soybean sale of 280,000 MT for delivery to “unknown destinations,” including 140,000 MT for delivery during the 2021-22 marketing year and 140,000 MT for 2022-23. Today’s announcement follows seven daily soybean sales since Nov. 30 totaling 931,000 MT for delivery to China or unknown destinations during the 2021-22 marketing year.
USDA’s Supply and Demand Report at 11 a.m. CT is expected to show minor revisions for U.S. and global grain and soybean stockpiles. Based on a Reuters survey, traders expect USDA to project 2021-22 U.S. ending stocks at 1.487 billion bu. for corn, 352 million bu. for soybeans and 589 million bu. for wheat. As with the domestic balance sheets, USDA is expected to just fine tune its global ending stocks forecasts this month.
Brazil’s official supply forecasting agency Conab now expects the country will produce a record soybean crop of 142.8 MMT in 2021-22, up 780,000 MT from its November forecast. It expects Brazilian exports to rise to 90.7 MMT, up 4.9 MMT from the current marketing year. Conab raised its Brazilian corn crop forecast by 469,000 MT to a record 117.2 MMT. It expects the country to ship 36.7 MMT of corn in 2022.
U.S. ag exports hit $17.6 billion in October, registering a new record to open fiscal 2022. That also marked a rise of more than $5 billion from the September mark. U.S. ag imports reached $14.8 billion in October, the second highest level on record. Since March, ag imports have been $14 billion or more seven of those eight months, with September just missing that level at $13.97 billion.
CORN: USDA reported net U.S. corn sales totaling 1.133 MMT for the week ended Dec. 2, up 11% from the previous week and up 2% from the average for the previous four weeks. Sales were within trade expectations ranging from 600,000 MT to 1.4 MMT. Exports of 904,600 MT were down both 4% from the previous week and from the four-week average.
SOYBEANS: Net U.S. soybean sales for the week ended Dec. 2 totaled 1.638 MMT, up 54% from the previous week and up 27% from the four-week average. Top buyers included China, at 893,400 MT, including 334,000 MT switched from unknown destinations. Sales were near the high end of expectations between 1 MMT to 1.7 MMT. Soybean meal sales totaled 202,500 MT, up 38% from the previous week and up 9% from the prior four-week average.
WHEAT: Net weekly U.S. wheat sales of 239,900 MT were up “noticeably” from the previous week but down 27% from the four-week average, USDA said. Sales were expected to range between 50,000 and 400,000 MT. March SRW wheat fell as low as $7.78 1/2 overnight, the lowest intraday price since $7.76 1/2 on Nov. 9.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firm
CATTLE: While cash cattle prices are expected to trade steady with last week’s 4 1/2-year highs, the wholesale beef market remains under pressure amid retailer hesitance to buy. Choice cutout values fell $3.92 yesterday to $264.11, the lowest daily average since April 6. Packers moved a respectable 161 loads but are having to slash prices to encourage retailer buying. USDA reported net weekly U.S. beef sales at 4,200 MT, a marketing-year low and down 81% from the four-week average. Sales for 2022 totaled 10,400 MT. February live cattle futures fell 55 cents yesterday to $138.675.
HOGS: Lean hog futures yesterday extended a slide to six-week lows, but may find support from a resurgent wholesale market and signs of bottoming in the CME lean hog index. Pork cutout values surged $9.35 yesterday to $90.44, as a gain of nearly $30 in hams fueled a rebound from 10-month lows. Movement was strong at nearly 413 loads. Today’s CME lean hog index is down 11 cents to $70.83. But the index posted gains in four of the previous five days, suggesting downside momentum is waning. USDA reported net weekly pork sales of 19,800 MT, down 52% from the previous week and down 26% from the prior four-week average. Sales for 2022 totaled 700 MT. February lean hog futures slipped 50 cents yesterday to $76.05, the lowest closing price since $74.325 on Oct. 27.
