Ahead of the Open | January 21, 2022
GRAIN CALLS
Corn: 2 to 4 cents lower.
Soybeans: 5 to 8 cents lower.
Wheat: 4 to 7 cents lower.
GENERAL COMMENTS: Soybean futures fell overnight in a corrective setback from yesterday’s jump to seven-month highs. Corn and wheat futures also dropped. Malaysian palm oil futures ended at a record high and posted a fifth straight weekly gain on lower production. Nymex crude oil was down slightly. U.S. stock index futures remain under pressure and the U.S. dollar index is down nearly 200 points this morning.
Areas of central Argentina received heavy rains overnight, while northern portions of the country, southern Brazil and Paraguay remained hot and dry. World Weather Inc. says the high-pressure ridge over these hot and dry areas is expected to break down during the middle of next week, bringing some relief, though models vary on amounts and coverage levels. Meanwhile, drier conditions in central and northern Brazil will benefit maturing soybeans in these wet areas.
Russia’s wheat export tax for Jan. 26-Feb. 1 will be $95.80 per metric ton, based on an indicative price of $336.90 per metric ton, down from the current rate of $97.50 per MT. This is the second week in a row the wheat tax has declined after rising every week for nearly four months. The wheat export tax is still up 241% from the beginning of June when Russia first started using the sliding scale.
CORN: USDA reported net U.S. corn sales for 2021-22 of 1.091 MMT for the week ended Jan. 13, more than double the previous week and up 48% from the average for the previous four weeks. Sales topped expectations ranging from 500,000 MT to 1 MMT. Exports of 1.298 MMT, a marketing-year high, rose 28% from the previous week and 29% from the four-week average. Net sales for 2022-23 totaled 105,000 MT. USDA also reported daily sales of 247,800 MT during the reporting period for delivery to unknown destinations during 2021-22.
SOYBEANS: Net weekly soybean sales of 671,000 MT for 2021-22 were down 9% from the previous week but up 12% from the prior four-week average. Top buyers included China, at 797,000 MT, including 661,500 MT switched from unknown destinations and decreases of 3,300 MT. Expectations ranged from 600,000 MT to 1.2 MMT. Net sales of 528,000 MT for 2022-23 included China, at 462,000 MT, and “unknown destinations,” at 66,000 MT. Exports of 1,804,600 MT were up 77% from the previous week and 15% from the prior four-week average. USDA announced daily sales of 132,000 MT of soybeans to China for 2021-22.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-mixed
CATTLE: Live cattle futures may see sideways trade ahead of USDA’s Cattle on Feed Report, with uncertainty over cash market direction limiting buying interest. The Cattle on Feed Report is expected to show Jan. 1 feedlot inventories at 99.8%, placements at 102.6% and marketings at 100.8% of year-ago levels. Cash sales this week were roughly steady compared with last week, though cash sources say if slaughter levels were normal, prices would have been stronger. Three weeks of Covid-related slowdowns has likely left 40,000 to 50,000 head of cattle in feedlots that would have been marketed, which may cap cash upside over the near-term. Choice cutout values rose another $1.38 yesterday to $292.98, the highest daily average since Sept. 30. Movement totaled 129 loads.
USDA reported net weekly U.S. beef sales at 12,800 MT for 2022, with featured buyers including China (3,900 MT, including decreases of 100 MT), Japan (2,100 MT, including decreases of 300 MT) and South Korea (1,800 MT, including decreases of 500 MT).
HOGS: Lean hog futures soared to contract highs this week on strengthening cash fundamentals, but technical signal the market is in overbought territory and may see some profit-taking pressure before the weekend. February hogs finished yesterday $8.425 above today’s CME lean hog index quote. Pork cutout values fell $3.23 yesterday to $92.24 as primal hams dropped nearly $26. Movement was relatively light at about 296 loads. April lean hog futures jumped $2.65 yesterday to $94.00, a lifetime-high close for the contract. February futures rose $2.625 to $84.925, the highest close for a nearby contract since mid-October.
USDA reported net weekly U.S. pork sales of 38,700 MT for 2022, primarily for Japan (21,800 MT, including decreases of 200 MT) and Mexico (9,700 MT, including decreases of 300 MT).
