Ahead of the Open | November 19, 2021

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GRAIN CALLS

Corn: 4 to 6 cents lower.

Soybeans: 4 to 6 cents lower.

Wheat: 2 to 5 cents lower.

GENERAL COMMENTS: Grain and soy complex futures fell overnight amid rising Covid concerns, dollar strength and a corrective setback from gains earlier this week. Malaysian palm oil futures fell slightly, while front-month Nymex crude oil fell around $2.50 to a six-week low. The U.S. dollar index is up sharply and near a 16-month high reached earlier this week.  

Concerns about a lysine shortage in the U.S. have fueled a strong rally in soymeal prices to the highest levels since summer, and there are concerns China could shut off lysine exports. Lysine shortages would increase soybean meal use in feed rations. A swine nutritionist told us a worst-case scenario in which the market completely runs out of lysine could increase soybean meal use by 50%. But that’s a worst-case and not likely to happen.

France’s winter wheat crop was 93% planted as of Nov. 15, according to the weekly update from FranceAgriMer, with durum 56% seeded. The French farm office rated 99% of the French winter wheat crop as being in good or excellent condition.

Ukrainian farms have harvested 76.7 MMT of grain from 93.3% of the sowing area, with the yield averaging 5.16 MT per hectare, the country’s agriculture ministry said today. The volume includes 32.3 MMT of wheat, 31.8 MMT of corn and small volumes of other grains, the ministry said.
 

CORN: December corn overnight fell as low as $5.68, the lowest intraday price since $5.66 3/4 on Nov. 12 and down from last week’s close at $5.77 1/4. Corn futures are poised to close the week on a weak note after failing to push meaningfully above a long-term downtrend line drawn from the May and July highs earlier this week.

SOYBEANS: January soybeans fell as low as $12.57 overnight but are up from $12.44 1/4 at the end of last week and heading for a second straight weekly gain. The most-active contact reached a seven-week high at $12.89 1/4 Nov. 17.

WHEAT: December SRW futures fell as low as $8.13 1/2 overnight but held within this week’s range and are up from $8.28 1/2 at the end of last week. March SRW futures hit a contract high at $8.54 yesterday, while March HRW futures hit a contract high at $8.53 1/4.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE: Live cattle are poised to end higher on the week after nearby futures rose yesterday to the highest close since June 2017. Cash cattle traded another $2 to $3 higher this week as packers boosted cash bids to fill out aggressive slaughter schedules over the next month amid a tightening supply of market-ready animals. Choice cutout values fell $2.31 yesterday to $276.16, the lowest since $275.22 on July 29. Select grade fell 90 cents to$263.16 and overall movement totaled 193 loads. February futures closed at a 2 1/2-month high yesterday and are up from last week’s close at $136. 10.

USDA’s monthly Cattle on Feed Report after today’s close is expected to show feedlot placements in October up 2.2% from the same month in 2020, based on a Reuters survey. The number of cattle on feed as of Nov. 1 is expected to decline about 0.2%, while October marketings are expected to be down 3.7%.

HOGS: Lean hog futures are on track for a sharp gain this week despite a prolonged cash market slump, supported by longer-term prospects for smaller animal supplies. Today’s CME Lean Hog Index is down $1.02 to $75.26, the lowest since Feb. 12. With December futures now trading in-line with the cash index, the lead-month contract likely will closely mimic daily movement in the cash market for the next three weeks. Pork cutout values jumped $5.17 yesterday to an average of $89.69, propelled by a surge of $22.51 in primal ham. Carcass values on national direct markets fell $1.20 to $55.10. February futures rose 15 cents yesterday to $83.30, the fourth gain in the past five days, and are up from $80.55 at the end of last week.

 

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