Ahead of the Open | January 5, 2022

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GRAIN CALLS

Corn: 1 to 3 cents lower.

Soybeans: 2 to 4 cents lower.

Wheat: 8 to 14 cents lower.

GENERAL COMMENTS: Soybean futures fell from a five-month overnight and corn and wheat futures also declined in a corrective setback from yesterday’s gains. Malaysian palm oil closed at a nine-month high on forecasts for tighter supplies, while Nymex crude oil rose near a six-week high. U.S. stock index futures and the U.S. dollar index are both lower this morning.

USDA reported a sale of 132,000 MT of soybeans for delivery to unknown destinations during the 2022-23 marketing year. This is the first daily soybean sales announcement since Dec. 17.

Part of yesterday’s rally in soybean and corn futures was tied to unconfirmed rumors China was in the market for supplies of both U.S. commodities. If China indeed booked U.S. soybeans and corn yesterday, it should be confirmed via daily sales announcements by week’s end.

China will auction another 500,000 MT of state-owned wheat reserves on Jan. 12. This is the second straight week of wheat sales from state reserves after China had not held any auctions since October.

Senate Foreign Relations Committee Chairman Bob Menendez (D-N.J.), along with legislative leaders in the UK and European Parliament, called for a coordinated investigation into alleged anticompetitive practices of Brazil-owned JBS, one of the largest U.S. meatpackers.

Tunisia purchased around 125,000 MT of soft wheat, 75,000 MT of durum and 75,000 MT of feed barley from unspecified origins. 

 

CORN: March corn traded in a narrow range overnight. Chart levels to watch include yesterday’s high at $6.11 1/2 and trendline support around $5.96.

SOYBEANS: March soybeans overnight reached $13.97 1/4, the contract’s highest intraday price since $13.99 1/2 on July 19. The most-active contract surged 34 1/4 cents yesterday. A push above the July high may have bulls targeting the contract high of $14.45 1/2 posted June 7.

WHEAT: March spring wheat extended a recent slide overnight, dropping below the 100-day moving average at $9.65 and fell to $9.55 3/4, the contract’s lowest intraday price since $9.52 3/4 on Oct. 19. March SRW wheat fell as low as $7.59 1/2 after gaining 2 3/4 cents on reports of deteriorating crops in the U.S Plains. Chart levels to watch in March SRW include this week’s low at $7.52 3/4.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE: Live cattle futures sank near a two-week low yesterday, which may compel packers to avoid bidding aggressively for cash cattle after boosting prices last week. But feedlots may be disinclined to move cattle at lower prices. With bids and asking prices not yet established, it appears it will be late in the week before there’s active cash trade. Recent strength in wholesale beef prices suggests retailer demand is improving. Choice cutout values rose 79 cents yesterday to a four-week high at $266.82, while Select rose 33 cents to 259.23. Movement totaled 160 loads. February live cattle fell $1.10 yesterday to $137.825, the contract’s lowest closing price since $137.375 on Dec. 22.

HOGS: Lean hogs futures may find support from strength in the CME lean hog index, which is up 90 cents to $72.75, the highest level since Dec. 20. But strength may be limited by futures’ large premium to the index and by weakness in wholesale pork. Pork cutout values fell 55 cents yesterday to an average of $85.47. Movement was strong at nearly 435 loads. February lean hogs fell 97.5 cents yesterday to $80.15, the lowest closing price since Dec. 20.

 

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