GRAIN CALLS
Corn: 3 to 5 cents higher.
Soybeans: 10 to 12 cents higher.
Wheat: 5 to 7 cents higher.
GENERAL COMMENTS: Following lackadaisical trade Tuesday, corn, soybeans and wheat surged overnight, pushing to fresh highs in the former two. That strength helps reinforce the idea selling after last week’s reports was overdone. A return to the long-standing sideways range in corn seems likely, while soybeans are threatening the downtrend that has persisted since mid-November. Outside markets are supportive this morning as front-month crude oil futures are modestly higher while the U.S. dollar index is around 200 points lower.
“Waves of arctic air continue to march through central and eastern parts of North America. The frequent succession of cold has dried out the atmosphere making it difficult for significant precipitation events to evolve in the northern and central Plains and portions of the Midwest,” reports World Weather Inc. “Two more surges of bitter cold are expected and many areas are snow free. Temperatures will drop near and below zero Fahrenheit later this week and during the weekend, raising a little concern over the fate of U.S. hard red and Midwest soft wheat as the coldest air arrives. Most likely the crop will handle the situation relatively well, but a layer of snow would certainly take the worry out of winterkill potentials,” said the forecaster.
U.S. stock futures staged a tentative recovery as traders and investors await President Trump’s address at Davos to see whether he will ratchet down days of tensions with Europe over U.S. ambitions to take Greenland. Selling pressure in U.S. and global markets eased after Trump struck a more conciliatory tone late Tuesday, ahead of his departure for the World Economic Forum in Davos, Switzerland, even as he continued to insist the U.S. should take control of the self-ruling territory. ”European leaders arriving at Davos this week are scrambling not just to manage Trump, but to manage one another. German Chancellor Friedrich Merz is seeking dialogue, French President Emmanuel Macron is openly pushing back, and smaller states are watching anxiously to see whether this crisis produces European solidarity — or exposes how it can fracture under pressure,” said Bloomberg, in a report. Meantime, Bessent cautioned European nations against increasing their military presence on Greenland. Bessent criticized Macron for calling to conduct a NATO exercise on Greenland, saying Macron should focus on France’s budget instead.
A sharp rise in volatility in Japan’s government bond market could spill over into other markets, forcing some investors to cut back risk across portfolios, Citigroup Inc. said and as reported by Bloomberg. “Risk parity funds may need to sell as much as one third of their current exposure, potentially triggering up to $130 billion of bond selling in the U.S. alone, according to Mohammed Apabhai. Volatility in Japan’s bond market has been picking up since early last year amid growing fiscal concerns, with meaningful spillover impact globally, and analysts now see Japan as a major exporter of global bond volatility,” said the report. Japanese Prime Minister Sanae Takaichi’s election pledge to cut food taxes has triggered a surge in long-end yields, with 30- and 40-year bond yields jumping more than 25 basis points to fresh highs on Tuesday. With a snap election in Japan coming on Feb. 8, traders and investors are worried there will be more volatility ahead.
CORN: March corn futures turned higher overnight. Prices are nearing 10-day moving average resistance at $4.28 3/4. Support stands at $4.23 3/4 on a turn lower.
SOYBEANS: March soybeans climbed to fresh highs overnight. Additional gains eye resistance at $10.73 3/4. Bulls are looking to maintain support above $10.61 1/2, with support coming in at $10.55 3/4 below that mark.
WHEAT: March SRW futures made up some of Tuesday’s loss overnight. Gains stalled ear resistance at $5.15 1/4 while additional strength eyes key resistance at $5.20 3/4. Support comes in at $5.13 1/2 then yesterday’s low of $5.09 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone in a continuation of the recent uptrend. February futures saw modest gains on Tuesday as bulls defended key technical support under the market. Cash trade has yet to initiate this week and trade is likely to be pushed late into the week given the Cattle on Feed report. Wholesale beef ended Tuesday mixed as choice rose 43 cents to $364.76 while select slid 49 cents to $359.84.
HOGS: Lean hogs are expected to open with a mostly firmer tone in a continuation of recent strength, though additional profit-taking can’t be ruled out. Bulls remain in full control of the technical advantage, encouraged by the recent rebound in the cash market. The CME lean hog index is up another 27 cents to $82.03 as of Jan. 19. Pork cutout sunk 73 cents to $93.47 Tuesday, led by losses in bellies and loins.