Ahead of the Open | February 9, 2022
GRAIN CALLS
Corn: 1 cent lower to 4 cents higher.
Soybeans: 5 to 7 cents higher.
Wheat: 2 to 4 cents lower.
GENERAL COMMENTS: Old-crop soybean futures rose near contract highs overnight, while the new-crop November contract posted a new high ahead of today’s USDA Supply & Demand Report at 11 a.m. CT. Corn futures erased earlier strength and turned mixed near the close of overnight trade, while wheat was slightly lower. Malaysian palm oil rose sharply after Indonesia issued a regulation stating it would start requiring export permits for all palm oil products. Nymex crude oil is near unchanged this morning and the U.S. dollar index is around 200 points lower.
USDA reported a daily sale of 240,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Since Jan. 28, USDA has reported a combined 2.66 MMT of soybean sales to China or “unknown destinations.”
Trade focus for USDA’s Supply & Demand Report will revolve around updated South American crop projections, which will likely drop due to drought but remain above most private forecasters. On the U.S. balance sheets, usage forecasts will be the focus. USDA is expected to lower its projection for Brazilian soybean production to 133.65 MMT from 139 MMT. Argentina’s soybean crop estimate is expected to be cut to 44.51 MMT from 46.5 MMT. USDA is expected to lower its Brazil corn crop estimate to 113.63 MMT from 115 MMT and its Argentina corn production forecast to 52.16 MMT from 54 MMT. Traders expect U.S. corn ending stocks to be lowered 28 million bu. to 1.512 billion bu. and soybean stocks to be lowered 40 million bu. to 310 million bushels. Wheat ending stocks are expected to be raised 1 million bu. to 629 million bushels.
Ukraine believes there is still a chance of resolving the standoff with Russia through diplomacy but says there are grounds to impose sanctions on Moscow. Ukraine’s Foreign Minister said Russia violated international law by issuing Russian passports to some Ukrainian citizens in separatist-controlled areas of eastern Ukraine, which provided a basis for imposing sanctions. The U.S. and its allies have threatened Russia with new sanctions, including stopping the Nord Stream 2 pipeline.
South Korea purchased 68,000 MT of corn from an unspecified origin out of a tender for 140,000 MT but passed on another tender for 68,000 MT of corn. South Korea also purchased 65,000 MT of feed wheat from an unspecified origin. Japan tendered to buy 80,000 MT of feed wheat and 100,000 MT of feed barley.
CORN: Overnight, March corn futures reached $6.38 1/2, the highest intraday price in a week. Key resistance is seen at the contract high of $6.42 1/2 posted Jan. 31, while initial support comes in around the 10-day moving average of $6.28 1/2.
SOYBEANS: March soybeans traded within yesterday’s range overnight and face key resistance at the contract high of $15.89 1/2 set Monday.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firmer
CATTLE: Live cattle futures may face followthrough pressure from yesterday’s declines and the wholesale beef market’s drop to four-week lows, but selling could be limited by signs of improving retail demand. Choice cutout values fell $1.50 yesterday to $277.46, the lowest daily average since Jan. 10, but movement was strong at 180 loads. Traders will watch for still-developing cash trade. Nearby February live cattle futures’ roughly $2.00 premium over last week’s five-area live steer average of $139.76 suggest a firmer tone the next few weeks.
