Ahead of the Open | November 21, 2021

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GRAIN CALLS

Corn: 2 to 3 cents lower.

Soybeans: 6 to 7 cents lower.

Wheat: SRW and spring wheat 3 to 5 cents lower, HRW 1 cent lower to 1 cent higher.

GENERAL COMMENTS: HRW wheat futures extended a rally to nine-year highs overnight after USDA crop ratings reflected dryness-driven deterioration in the U.S. crop. Other wheat markets, along with corn and soybeans fell. Malaysian palm oil futures fell over 1.0%. The U.S. dollar index is little changed after rising to a 16-month high.

The White House announced this morning it would make 50 million barrels of oil available from the U.S. Strategic Petroleum Reserve (SPR) in an effort to tamp down high fuel prices. The release was made concert with other releases from strategic reserves by China, India, South Korea, Japan and the UK.

Crop Consultant Dr. Michael Cordonnier left his Brazilian soybean crop estimate at 144 MMT, but his bias changed to neutral from neutral to slightly lower the past several weeks due to a drier forecast for southern Brazil. Cordonnier also left his Brazilian corn crop estimate at 118 MMT and has a neutral bias. For Argentina, Cordonnier kept his production estimates at 50 MMT for soybeans and 53 MMT for corn, with a neutral bias for both crops.

Sen. Elizabeth Warren (D-Mass.) asked the Justice Department to open an antitrust investigation into the poultry industry as turkey prices soar ahead of Thanksgiving. Warren blamed the price rises on anti-competitive practices by major poultry companies.

 

CORN: December corn futures overnight held within yesterday’s range and may continue to look to soybean and wheat markets for direction as trading slows ahead of the Thanksgiving Day holiday. Late yesterday, USDA reported the U.S. corn harvest at 95% complete as of Nov. 21, up from 91% a week earlier and slightly under trade expectations for 96%. Chart levels to watch for December corn include yesterday’s low at $5.69 3/4.

SOYBEANS: January soybeans held within yesterday’s range overnight as the market waits for export news. Favorable growing conditions in South America may limit buying interest. USDA said 95% of the U.S. soybean crop was harvested as of Nov. 21, up from 92% a week earlier and slightly under trade expectations for 96%. Chart levels to watch in January futures include yesterday’s low at $12.60.

WHEAT: USDA late yesterday reported the winter wheat crop condition at 44% “good” or “excellent” as of Nov. 21, down from 46% the previous week. Analysts expected the rating to hold at 46%. Wheat rated “poor” or “very poor” rose to 22% from 20%. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 3.3 points to 329.6, while the SRW crop fell 9.4 points to 357.8. The HRW crop is 10 points below the five-year average for this date. The SRW CCI rating is now four points below its five-year average – the first time below average this fall. March HRW futures overnight reached a contact high for the second straight day, hitting $8.71 3/4.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-mixed

CATTLE: February live cattle settled at the highest level in nearly three months yesterday but followthrough may be limited without direction from the cash market. No bids or asking prices were established yesterday, and it’s unclear whether packers will continue their recent aggressive pursuit of live animals during a holiday-shortened week. Live steers in five top feedlot regions last week averaged $133.11, up 1.2% from the previous week for the seventh straight weekly gain and a 4 1/2-year high. Choice cutout values rose 84 cents on Monday to $279.25 on movement of 124 loads. The market’s drop under $280.00 late last week appeared to stir retailer buying, similar to previous price action earlier this year. December cattle yesterday rose 90 cents to $134.425, the highest closing price for a nearby contract since April 2017. February live cattle rose $1.275 to $138.975, the contract’s highest closing price since $139.00 on Aug. 26.

China’s customs authorities said it will accept import applications for Brazilian beef that was granted a sanitary certificate prior to Sept. 4. Brazil suspended exports of beef to China on that date after detecting two cases of atypical bovine spongiform encephalopathy (BSE) but meat that was already at ports continued to be shipped, with most of it unable to clear customs on arrival in China.

HOGS: Hog futures remain in an uptrend since late October amid beliefs the market has established a near-term low, but continued weakness in cash fundamentals may limit upside this week. The CME lean hog index is down another 57 cents today to $72.88, the lowest since Feb. 10. Pork carcass cutout values yesterday fell $3.57 to an average of $86.25, again erasing a morning gain as primal hams dropped over $10.00. Movement was strong at nearly 385 loads. The national direct average carcass price fell 4 cents to $54.91. Chart levels to watch in February hogs include $83.725, a six-week high reached yesterday.

 

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