Ahead of the Open | November 18, 2021

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GRAIN CALLS

Corn: 2 to 3 cents higher.

Soybeans: 3 to 5 cents higher.

Wheat: 10 to 14 cents higher.

GENERAL COMMENTS: Winter wheat futures extended gains to multi-year highs overnight. Corn and soybean futures also climbed. Malaysian palm oil futures rose over 2.0%, while Nymex crude oil rebounded from earlier losses. The U.S. dollar index is near unchanged this morning after reaching a 16-month high yesterday.  

Consultancy Strategie Grains lowered its outlook for 2021-22 EU exports of soft wheat by 1.6 MMT to 30.4 MMT, citing high prices that will reduce demand and cause some processors to switch to corn. Strategie Grains also increased its forecast for 2021-22 EU soft wheat stocks by more than 2 MMT to just over 12 MMT.

China imported 1.3 MMT of corn in October, up 14% from last year. Through October, China imported 26.23 MMT of corn, a 236% surge from the same period last year. China’s sorghum imports totaled 830,000 MT in October, up 57% from last year, and its imports for the first 10 months of the year at 8.18 MMT jumped 103%. China brought in 480,000 MT of wheat last month, down 23% from last year, but its imports through October at 8.08 MMT rose 21% from year-ago levels.

China imported 200,000 MT of pork in October, which was down 4.8% September but 41% lower than last year. Through the first 10 months of this year, China imported 3.34 MMT of pork, a 7.7% drop from the same period last year.

Russia sold about 250,000 MT of wheat in the latest Algerian tender, the head of the country’s state grain quality service said yesterday. Russia, the world's largest wheat exporter, has been lobbying for access to the Algerian market, traditionally dominated by France, for years.

 

CORN: Net U.S. corn sales for the week ended Nov. 11 totaled 904,600 MT, down 15% from the previous week and down 19% from the average for the previous four weeks. Expectations ranged from 800,000 MT to 1.4 MMT, based on a Reuters survey of analysts. December corn futures overnight traded within yesterday’s range. The lead contract yesterday briefly pushed above a downtrend line drawn from the May and June highs before trimming gains.

SOYBEANS: Net weekly U.S. soybean sales totaled 1.383 MMT, up 13% from the previous week but down 20% from the average for the previous four weeks. Sales were at the high end of expectations ranging from 1 MMT to 1.4 MMT. China was a lead buyer at 727,500 MT, including 394,000 MT switched from unknown destinations. Over the previous four days, USDA announced daily soybean sales totaling 814,000 MT for China and “unknown destinations.”

January soybeans overnight rose to $12.87 1/4, just under the seven-week high at $12.89 1/4 reached yesterday. The lead contract yesterday broke above a downtrend line drawn from the May and July highs. Upside targets for market bulls include closing January futures above solid resistance at $13.00.

WHEAT: Net weekly U.S. wheat sales totaled 399,100 MMT, up 40% from the previous week and up 21% from the average for the previous four weeks. Expectations ranged from 250,000 to 500,000 MT. Exports of 310,900 MT were up 15% from the previous week and up 65% from the four-week average. March SRW futures hit a contract high at $8.47 1/2 overnight, as did March HRW futures at $8.48 3/4.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-mixed

CATTLE: Live cattle may find support as the cash market extends a recent climb to 4 1/2-year highs, but further weakness in wholesale beef may limit the upside. Live steers in five top feedlot areas averaged $132.05 yesterday, compared to last week’s average of $131.47. Choice cutout values fell $3.66 yesterday to $278.47, the lowest since late July, but strong movement at 188 loads indicates the price drop has stirred demand. Exports have picked up recently, with net weekly beef sales totaling 25,500 MT, up 23% from the previous week and up 58% from the four-week average. China was the prominent buyer at 13,800 MT. USDA’s Cattle on Feed Report tomorrow is expected to show feedlot placements in October rose 2.2% from year-ago, based on a Reuters survey of analysts. The number of cattle on feed as of Nov. 1 is expected to decline about 0.2%.

HOGS: February lean hog futures reached a five-week high yesterday at $83.475 before ending lower. Cash fundamentals remain soft, but signs of stabilization in the CME lean hog index could help the market extend to the upside. Today’s CME lean hog index is down 5 cents to $76.28, near a nine-month low hit at the end of last week. A stabilization of the index may confirm beliefs the cash market is establishing an early seasonal low. Pork cutout values fell $3.25 yesterday to $84.52, the lowest daily price since early February and led by a drop of nearly $10.00 in bellies. Movement was relatively strong at over 384 loads. Carcasses on national direct markets fell 86 cents to $56.30. Net weekly pork sales totaled 25,000 MT, up 7% from the previous week but down 16% from the four-week average, with Mexico the lead buyer at 16,900 MT.

 

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