Ahead of the Open | November 29, 2021

GRAIN CALLS

Corn: 1 to 2 cents lower.

Soybeans: 7 to 8 cents higher.

Wheat: 4 to 10 cents higher.

GENERAL COMMENTS: Wheat futures extended last week’s gains overnight amid tightening global milling-quality supplies and soybeans also rose, while corn fell slightly. Malaysian palm oil futures ended slightly higher. Nymex crude oil surged over 3.0% and U.S. stock market is poised to open higher in a rebound from last Friday’s selloff that was triggered by concern over the Covid omicron variant. The U.S. dollar index is up slightly.

Planting of Brazil's 2021-22 soybean crop was almost 91% complete on Nov. 26, up from 84% the previous week and about five percentage points above the five-year average for that date, according to agribusiness consultant Safras & Mercado. In Mato Grosso, Brazil's biggest-producing state, soybean planting was complete and was nearly finished in Parana, a survey showed.

Though planting is also nearly complete in Brazil's southernmost state of Rio Grande do Sul, dry weather during November could lead farmers to replant soybeans in the newly sown areas, agribusiness consultancy AgRural said. AgRural said more rain across a bigger area would be needed to normalize soil moisture levels in parts of southern Brazil.

Russian wheat prices gained for the sixth consecutive week amid strong export demand, analysts said. Russian wheat with 12.5% protein loading from Black Sea ports for supply in the first half of December was $340 per MT free on board (FOB) at the end of last week, up $6 from the previous week, the IKAR consultancy said. SovEcon, another consultancy, said wheat prices rose $6 to $343 per MT.

CORN: March corn futures rose as high as $5.94 overnight before fading, after the most-active contract gained 2.5% last week and closed at the highest settlement since $5.89 on July 1. U.S. harvest is largely finished and the market is shifting focus to ethanol demand and exports, amid recent signs of improved foreign interest.

SOYBEANS: January soybeans overnight rose as high as $12.68 1/2, after dropping 13 3/4 cents last Friday to $12.52 3/4, the lowest close in over a week. Traders will watch for further signs of Chinese export business and weather in South America, which has been mostly favorable for early crop development, though a drier pattern is expected to develop in some parts of Brazil, according to World Weather Inc.

WHEAT: March SRW futures overnight rose as high as $8.55 1/4 after ending last week at $8.40 1/4, up 0.7% for the week and the third consecutive weekly increase. Global supply concerns have been exacerbated by heavy late-season rains in Australia that are hampering crop quality. The country is still expected to harvest a record crop, but there will be far more feed quality supplies and less milling quality than normal.

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE: Live cattle may extend last week’s rally to 4 1/2-year highs on strong cash fundamentals and tight supplies of slaughter-ready animals. Many feedlots passed at packer bids near $140 last week in hopes for even higher prices. Last Friday, USDA reported live steers in top feedlot areas at an average of $138.13, up over $5.00 from a week ago. Packers may be able to better hold the line on prices this week since they’ll soon gain access to contracted cattle for December. That could prompt a short-term futures setback. On wholesale markets, Choice cutout values rose $1.04 Friday to $280.15, up 0.6% from $278.41 at the end of last week. February live cattle rose 32.5 cents Friday to $141.50, a lifetime high close for the contract, while December live cattle rose 20 cents to $138.10, the highest closing price for a nearby contract since April 2017.

HOGS: Lean hog futures may see continued pressure from a slumping CME lean hog index, which is down another 93 cents today to $71.63, the lowest since early February. December lean hog futures finished last Friday $1.57 above today’s index today while the February contract was over $9.00 higher. Those premiums could lead to followthrough selling in hog futures today, though outside market concerns have eased. Pork cutout values ended last week at an average of $83.98, down 6.5% from $89.82 at the end of the previous week and the lowest daily price since early February. Movement was about 201 loads, down from levels earlier in the week. February lean hog futures last Friday fell $3.225 to $81.025, a two-week closing low. Slaughter during the holiday-shortened week was an estimated 2.261 million head, down 368,000 from last week.