Ahead of the Open | November 12, 2021

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GRAIN CALLS

Corn: 2 to 3 cents lower.

Soybeans: Steady to 2 cents higher.

Wheat: 1 to 5 cents lower.

GENERAL COMMENTS: Wheat futures fell overnight in a mild pullback. Corn futures also weakened. Soybean futures finished slightly firmer overnight after light two-sided trade. Malaysian palm oil futures rose over 1.0% for the week, while front-month Nymex crude oil futures dropped more than $1.50 overnight. The U.S. dollar index is near unchanged this morning.  

USDA reported daily soybean sales of 256,930 MT to unknown destinations during the reporting period.

Brazil yesterday became the first country to allow imports of flour made with genetically modified wheat, though shipments of the new variety developed in Argentina are unlikely anytime soon due to opposition from Brazilian millers and global consumers. Brazil's biosecurity agency CTNBio said its unanimous decision applied only to wheat flour.

Russia’s sliding export tax on wheat shipments will rise to $77.10 per metric ton for the week of Nov. 17-23, up 10.3% from the current rate, the country’s ag ministry said. The wheat export tax has surged 174% since the beginning of June when Russia’s government launched its formula-based duty.

Ukrainian farmers had seeded 6.2 million hectares to winter wheat as of Nov. 11, according to the country’s ag ministry. That was 94% of the 6.66 million hectares farmers planned to sow to winter wheat this year. Ukraine has exported 21.5 MMT of grain so far in 2021-22, up 19% at the same stage a year earlier. That included 13.1 MMT of wheat and 3.5 MMT of corn.

CORN: Net U.S. corn sales for the week ended Nov. 4 totaled 1.067 MMT, down 13% from the previous week and down 4% from the average for the previous four weeks. Sales were in the middle of trade expectations ranging from 700,000 MT to 1.4 MMT, based on a Reuters survey of analysts. December corn futures overnight fell as low as $5.66 3/4 but are still up from $5.53 at the end of last week.

SOYBEANS: Net weekly soybeans sales totaled 1.289 MMT, down 31% from the previous week and down 25% from the four-week average. Top buyers included China (939,300 MT), Germany (311,400 MT) and Egypt (231,400 MT). Sales were near the middle of trade expectations ranging from 950,000 MT to 1.8 MMT. January soybeans overnight rose as high as $12.29 and are up from $12.05 1/2 at the end of last week.

WHEAT: Net weekly wheat sales of 285,900 MT were down 29% both from the previous week and from the prior four-week average, with the Philippines (152,000 MT), Japan (57,400 MT) and Mexico (37,200 MT) top buyers. Sales were at the low end of trade expectations ranging from 200,000 to 500,000 MT. December SRW futures overnight fell as low as $8.08 1/2 but are still up from last week’s close at $7.66 1/2.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-mixed

CATTLE: Live cattle are poised for a slight gain on the week after trading sideways the past several days, with weaker wholesale beef prices limiting upside. Packers were active buyers again this week, helping push cash prices to the highest levels since 2017, but the market may be nearing a short-term top. Cutout values have fallen to two-week lows, indicating record retail beef prices are hurting demand. Early yesterday, USDA reported Choice grade cutout values fell $1.29 to an average of $284.23, the fifth consecutive daily decline. Live steers in some areas topped $132.00, compared to last’s week’s average of $129.23. Net weekly beef sales totaled 20,600 MT, up 23% from the previous week and up 39% from the four-week average, with China (8,200 MT) and Taiwan (4,300 MT) prominent buyers.

December live cattle fell 12.5 cents yesterday to $131.875, up from last week’s close at $131.80. Chart levels to watch include this week’s intraday high at $132.50, also a two-month high, and the 100-day moving average around $131.25.

HOGS: December lean hog futures are on track to end lower on the week after closing last week at $76.55 amid pressure from slumping cash fundamentals. The preliminary CME Lean Hog index is down 77 cents to $77.95, the lowest since February. Futures’ have narrowed the discount to the cash index, but the spread still reflects expectations the cash market will continue to weaken into early December or longer. Pork carcass cutout values rebounded sharply early yesterday to $95.30 but are still down from $96.35 at the end of last week. Net weekly U.S. pork sales totaled 23,300 MT, down 49% from the previous week and down 28% from the four-week average. Lead buyers included Mexico (7,800 MT), China (5,800 MT) and Japan (5,400 MT). Chart levels to watch in December futures include yesterday’s low at $73.70 and the 40-day moving average at $75.60.

 

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