GRAIN CALLS
Corn: 1 to 3 cents higher.
Soybeans: 4 to 6 cents higher.
Wheat: 1 to 3 cents higher.
GENERAL COMMENTS: Corn, soybeans and wheat each favored the upside overnight but saw some profit-taking going into the break. Uptrends have been threatened in each market and bulls need to build momentum soon. Outside markets are mixed this morning as equity futures are trading near unchanged, front-month crude oil futures are modestly lower and the U.S. dollar index is around 200 points lower.
President Trump and Chinese President Xi Jinping on Monday held their first talks since agreeing to a tariff truce last month, discussing trade, Taiwan and Russia’s invasion of Ukraine. Trump said the telephone call was “very good” and that the leaders spoke about purchases of soybeans and other farm products as well as curbing shipments of illegal fentanyl, as reported by Bloomberg. Trump said he agreed to visit Beijing in April, and that he had invited Xi for a state visit next year. “Our relationship with China is extremely strong!” Trump posted on social media. “There has been significant progress on both sides in keeping our agreements current and accurate. Now we can set our sights on the big picture.”
A very heavy slate of U.S. economic data due out today includes September weekly USDA export sales, the USDA outlook for U.S. agricultural trade, retail sales, the September producer price index, pending homes sales, the Richmond Fed business survey, the monthly house price index, the consumer confidence index, manufacturing and trade inventories and the monthly Treasury budget statement. Wednesday comes the weekly jobless claims report, durable goods orders, the second estimate of third-quarter GDP, the advance economic indicators report, the Chicago ISM business survey, personal income and outlays (including the key inflation gauges), new residential sales, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.
A U.S. official is in Abu Dhabi for meetings with a Russian delegation as President Trump cited progress on his peace proposal and Moscow and Ukraine carried out airstrikes overnight. U.S. Army Secretary Dan Driscoll met with Russian officials in Abu Dhabi for several hours on Monday night and held talks with them on Tuesday as well, according to a U.S. official and as reported by Bloomberg. Kremlin spokesman Dmitry Peskov said he had nothing to say on reports of the meeting, according to the Interfax news service. The talks occurred after Trump suggested in a social media post that “big progress” was being made on a deal for Ukraine. His comment signaled that Secretary of State Marco Rubio and Ukrainian officials who met Sunday in Geneva made advances in defusing the vehement opposition from Kyiv and its European allies to a 28-point peace proposal the White House team floated last week. Moscow and Kyiv exchanged fire overnight with heavy air raids on Kyiv and assaults on southern Russian areas.
CORN: March corn futures bounced overnight. Resistance stands at $4.41 on persistent strength. Support comes in at yesterday’s low of $4.34 1/2 on a reversal lower.
SOYBEANS: January soybeans saw relative strength overnight. The 10-day moving average continues to serve up resistance at $11.29, which is reinforced by resistance at $11.40. Support stands at $11.19, the 20-day moving average.
WHEAT: March SRW wheat traded on either side of unchanged overnight. Resistance stands at $5.42 1/2 on strength, while support comes in at yesterday’s low of $5.31 3/4 on a turn lower.
LIVESTOCK CALLS
CATTLE: Lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open lower on followthrough selling pressure. Oversold conditions could limit the downside, but yesterday’s locked lower limit session has some traders on the wrong side of the market, which is likely to lead to additional selling today. Last week, cash cattle trade averaged $217.41, down $7.65 from last week. Wholesale beef saw weakness Monday, with choice cutout falling 99 cents to $370.49, while select slid $1.47 to $355.51. Limits will be expanded today in futures following yesterday’s limit lower closes.
HOGS: Lean hog futures are expected to open with a mostly weaker tone, driven by technical selling pressure. Bulls continue to struggle against 10-day moving average resistance, which stands at $79.50. That capped gains last week and Monday and stands as solid resistance in February futures. The CME lean hog index continues to trend lower seasonally, falling $1.20 to $83.61 as of Nov. 21. Pork cutout rose 35 cents to $93.78 Monday, led by gains in ribs and bellies.