Ahead of the Open | January 11, 2022

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GRAIN CALLS

Corn: 1 to 3 cents higher.

Soybeans: Steady to 4 cents lower.

Wheat: 2 to 6 cents higher.

GENERAL COMMENTS: Corn and wheat futures rose slightly overnight and soybeans fell in narrow-range trade ahead of USDA reports tomorrow. Malaysian palm oil futures rose near a 10-week closing high on tighter supplies, while Nymex crude oil was up around $1 and near two-month highs. U.S. stock index futures rose slightly and the U.S. dollar index was slightly weaker.

USDA reported a daily sale of 100,000 MT of soybeans for delivery to Mexico during the 2021-22 marketing year. Today’s sale follows USDA’s announcement yesterday of daily corn sales totaling 132,000 MT to Mexico for delivery in 2021-22 and 2022-23.

Conab, Brazil’s crop forecasting agency, lowered its 2021-22 forecast for the country’s corn and soybean crops due to drought in key growing regions. Brazil is expected to produce 140.5 MMT of soybeans, down 2.3 MMT from Conab’s December forecast. Conab cut its estimate for Brazil's corn crop by 4.3 MMT to 112.9 MMT.

Crop Consultant Dr. Michael Cordonnier lowered to his South American production estimates again this week. Cordonnier cut his Brazilian crop estimate 3 MMT to 135 MMT and his Brazilian corn forecast 1 MMT to 112 MMT. He lowered his Argentine soybean crop estimate 2 MMT to 43 MMT and his Argentine corn crop projection 1 MMT to 51 MMT.

China will maintain anti-dumping and anti-subsidy tariffs on imports of dried distillers grains (DDGs) from the U.S. while it conducts an expiry review starting Jan. 12 that could take a year to complete.

South Korea bought 259,000 MT of optional origin corn in two separate tenders but passed on a tender to buy 65,000 MT of feed wheat. Japan is seeking 107,555 MT of milling wheat from the U.S. and Canada in its weekly tender. Turkey tendered to buy 335,000 MT of optional origin milling wheat.

 

CORN: USDA reports tomorrow include the final estimate for the 2021 U.S. corn crop, plus updates on South American production, Dec. 1 stocks and updates to the domestic and global balance sheets. The U.S. corn crop is expected to be revised up about 7 million bu., to 15.069 billion bu., based on a Reuters survey of analysts. March corn rose as high as $6.03 3/4 overnight after falling 7 cents yesterday to $5.99 3/4.

SOYBEANS: Improved rainfall prospects in southern Brazil may continue to pressure soybean futures. World Weather Inc. expects a shift in Brazil’s weather pattern starting Friday, bringing “light and mostly inconsequential” showers before showers and thunderstorms become better organized Jan. 16-20, with additional rain Jan. 23-25. Rain Jan. 16-20 “is not likely to be heavy in many areas, but at least some relief from dryness should occur and crops that have not been too badly harmed by dryness will respond to the moisture and yield potentials may increase,” the forecaster said.

WHEAT: USDA’s Winter Wheat Seedings Report tomorrow is expected to show all U.S. winter wheat plantings at 34.255 million acres, up from 33.648 million in 2021, based on a Reuters survey. March SRW wheat futures rose as high as $7.66 1/4 overnight after rising 3 1/2 cents yesterday to $7.62.

 

LIVESTOCK CALLS

CATTLE: Mixed-weaker

HOGS: Mixed-firmer

CATTLE: Live cattle futures may face pressure on prospects for continued cash market weakness and uncertainty over how much production may be lost from Covid absences at U.S. beef plants. Despite a strengthening boxed beef market, traders expect further softness in cash prices after the live steer average last week fell to $138.41 from $139.59 the previous week. Choice cutout values rose $4.22 yesterday to $276.04, the highest daily average since Nov. 29 and a sign of scaled-up demand as retailers restock following the holidays. Movement totaled 107 loads. February live cattle yesterday fell $1.075 to $136.25, a three-week closing low, while March feeder cattle fell $1.325 to $165.35.

HOGS: Lean hog futures may face followthrough pressure from steep declines the past two sessions, but weakness may be limited by strengthening cash fundamentals. The CME lean hog index is up 97 cents to $74.70, the highest since Nov. 17. February futures’ premium to the index shrank to just $3.675 with yesterday’s drop, which may limit near-term selling pressure. Pork cutout values rose 52 cents yesterday to an average of $86.42 on movement of nearly 415 loads. February lean hogs yesterday fell $1.275 to $78.375, the lowest settlement since Dec. 9. Charts have turned increasingly bearish with the recent selloff and momentum favors market bears.

Thai authorities said African swine fever (ASF) was detected in a sample collected at a slaughterhouse in Nakhon Pathom province, marking the country’s first official confirmation of the disease. Thai officials started collecting blood samples from slaughterhouses amid growing speculation that an ASF outbreak was being hidden and decimating the Thai hog herd.

 

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