Ahead of the Open | November 15, 2021

GRAIN CALLS

Corn: 1 to 2 cents lower.

Soybeans: Steady to 2 cents lower.

Wheat: HRW steady to 2 cents lower, SRW and spring wheat 1 to 3 cents higher.

GENERAL COMMENTS: SRW wheat futures firmed overnight, near nine-year highs, while HRW futures eased slightly, along with corn and soybeans. Malaysian palm oil futures were moderately higher, while front-month Nymex crude oil futures fell around $1, dipping below $80 a barrel. The U.S. dollar index is modestly weaker this morning.

USDA reported a daily soybean sale of 264,000 MT for delivery to “unknown destinations” for delivery during the 2021-22 marketing year, along with daily corn sales of 198,200 MT for delivery to Mexico, including 148,200 MT is for delivery during the 2021-2022 marketing year and 50,000 MT for 2022-23.

NOPA members later this morning are expected to report soybean crushings of 181.9 million bu. in October, according to a Reuters survey. The projected number would be up 18.3% from September and the fourth largest crush for any month on record, but 1.8% below October 2020, which was the largest-ever crush for any month. Soyoil stocks are expected to rise for a fourth straight month, with the average estimate at 1.724 billion pounds.

Russian wheat prices gained for the fourth consecutive week, inflated by concerns of further export limits from the world's top wheat exporter. Russian wheat with 12.5% protein loading from Black Sea ports for supply in the second half of November was $328 per MT free on board (FOB) at the end of last week, up $2 from the previous week, the IKAR consultancy said.

Top U.S. meatpacker Tyson Foods Inc. forecast fiscal 2022 revenue above market estimates today, boosted by rising meat prices and improving demand from restaurants that have reopened after Covid-19 restrictions. Tyson said it was expecting sales to be about $49 billion to $51 billion for fiscal 2022, compared with market estimates of $47.99 billion, according to Refinitiv IBES. Net income attributable to Tyson increased to $1.36 billion, or $3.71 per share, from $654 million, or $1.79 per share, a year earlier.

CORN: December corn futures overnight fell as low as $5.73 1/2 after surging 24 1/4 cents, or 4.4% last week, the third weekly gain in the past four. Strong technicals and fund buying may support futures this week. USDA’s next Crop Progress report after the close today will likely show the corn harvest near completion. The crop was 84% harvested as of Nov. 7.

SOYBEANS: January soybeans fell as low as $12.38 overnight after gaining 38 3/4 cents, or 3.2%, last week. Harvest pressure is winding down and market focus is shifting toward exports and South American weather, which has been mostly favorable for early soybean development. Brazil and Argentina are expected to get timely rainfall over the next two weeks, “maintaining a mostly good environment for summer crop planting and development,” World Weather Inc. said.

WHEAT: December SRW futures rose as high as $8.23 1/2 overnight after rallying 50 1/2 cents last week to $8.17, the highest closing price for a nearby contract since December 2012. Most of the western U.S. HRW wheat area will be dry over the next two weeks, according to World Weather. A few showers may fall in Nebraska and some easternmost production areas will get rain, but amounts will not be very great in the areas that need moisture most. USDA’s weekly crop condition ratings later today likely will continue to reflect moisture stress.

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Mixed

CATTLE: December live cattle ended last week at $132.125, up 42.5 cents for the week and the third consecutive weekly gain. Cattle futures may see a continuation of sideways to higher trade this week on strong cash prices and tighter animal supplies. Live steers on Friday averaged $131.35, up from the previous week's average of $129.23 and near the highest levels in four years. Futures strength may be muted by wholesale market weakness and record retail beef prices that are curbing demand. Choice cutout values ended last week at $284.30, down 1.8% from $289.54 at the end of the previous week and the lowest since Oct. 27. Still, packer margins remain strong, enabling them to maintain firmer cash bids if they need the cattle. Cattle slaughter last week totaled 655,000 head, up 0.8% from the previous week but down 0.3% from the same week in 2020. Chart levels to watch in December live cattle include last 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 ended last week at $75.875, down 0.8% on the week and in the middle of the past month’s range. Futures may be under further pressure this week from slumping cash fundamentals. The CME lean hog index is down $1.27 today to $76.68, the lowest level since mid-February. December futures remain at a discount to the index, but the rapid drop in cash values likely will limit futures to modest corrective bounces and may produce fresh selling. Pork carcass cutout values ended last week at $94.71, down 1.7% for the week but up from a nine-month low Nov. 10. Meatpackers last week slaughtered an estimated 2.614 million head, up 0.4% from the previous week but down 2.5% from the same week in 2020. Year-to-date, slaughter is running 2.0% under 2020 levels.

Chart levels to watch in December futures include last week’s low at $73.70 and the 40-day moving average around $77.60.