Ahead of the Open | February 4, 2022
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 1 to 3 cents higher.
Wheat: 1 to 5 cents higher.
GENERAL COMMENTS: Soybean futures rose overnight near the contract highs posted earlier this week, while wheat futures also climbed. Corn futures turned mixed near the end of overnight trade. Malaysian palm oil futures rose sharply, while Nymex crude oil surged above $92 and posted seven-year highs. The U.S. dollar index strengthened after stronger-than-expected U.S. job growth.
USDA reported daily soybean sales of 295,000 MT to unknown destinations, including 252,000 MT for 2021-22 and 43,000 MT for 2022-23.
U.S. non-farm payrolls jumped by 467,000 in January, more than triple analysts’ expectations and breaking a series of disappointing job reports. Payrolls were expected to rise about 150,000. The unemployment rate rose to 4.0%. The numbers bolster beliefs the Federal Reserve will begin hiking benchmark rates soon, possibly in March, to tame surging inflation.
Corteva Inc. expects prices for grains and oilseeds to remain high this year on record demand levels, the insecticide and seed company's CEO said after an optimistic sales outlook. “Over the medium to long term, we see constructive fundamentals continuing, as possible new demand to support renewable fuels such as bio-based diesel will likely support healthy agricultural commodity price levels,” CEO Chuck Margo said during a call with analysts. Corteva expects high fertilizer prices to prompt some farmers to shift to soybeans from corn.
South Korea purchased up to 65,000 MT of corn from an unspecified origin.
CORN: March corn futures fell as low as $6.14 3/4 overnight and are on track for the first weekly decline in the past three. The lead contract fell yesterday to $6.16 3/4, the lowest closing price since $6.16 1/4 on Jan. 21, and is down from $6.36 at the end of last week. Expected crop shortfalls in South America remain supportive for prices, but crop losses have likely been factored in and the market requires sustained export business and an extended rally in soybeans to hold at elevated levels.
SOYBEANS: March soybeans overnight rose as high as $15.60 1/4, just 3 3/4 cents under the contract high posted earlier this week, and are up from $14.70 at the end of last week. A string of private forecaster cuts to estimated South American production supported the market this week, along with a flurry of fresh export business.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-weaker
CATTLE: Live cattle futures yesterday fell for the first time in five sessions and the soft close may lead to followthrough pressure today, though stronger cash prices should provide support. Cash cattle strengthened this week as meatpackers boosted slaughter rates, but continued weakness in boxed beef indicates packers are cutting prices to stir retail demand. Choice cutout values fell $1.69 yesterday to $281.46, a three-week low, though movement remained relatively strong at 134 loads. USDA-reported live steers averaged $139.99 so far this week, up about $3.00 from last week. April live cattle fell 15 cents yesterday to $146.75, after posting a contract high at $147.275. March feeder cattle fell 15 cents to $166.725.
