Ahead of the Open | November 29, 2023
GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 3 to 6 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW 6 to 8 cents higher; HRS 4 to 6 cents higher.
GENERAL COMMENTS: Soybeans and wheat saw continued followthrough buying overnight, while corn continues to struggle garnering strength, though losses remain limited. Outside markets were mixed overnight as front-month crude oil futures are around a dollar higher ahead of this week’s OPEC + meeting and the U.S. dollar index is trading around 150 points higher.
Net drying is expected in center west, portions of center south and northeastern Brazil through Saturday, World Weather Inc reports. Some areas are expected to receive rainfall Sunday into Tuesday or Wednesday of next week offering relief, though a needed boost in soil moisture that would carry the crops for any extended period is unlikely, the forecaster says.
The global economy will experience a slight slowdown next year, but the risk of a hard landing has diminished despite high debt levels and uncertainty over interest rates, the Organization for Economic Cooperation and Development (OECD) said. OECD forecasts global economic growth will slow to 2.7% in 2024 from 2.9% this year, before rising to 3.0% in 2025. OECD predicted U.S. growth would slow from 2.4% this year to 1.5% in 2024, though both were up 0.2 points from its previous forecast. OECD’s forecast is for China’s growth to slow from 5.2% this year to 4.7% in 2024 – both slightly higher than expected in September – before slowing to 4.2% in 2025.
Morocco will offer subsidies to import up to 2.5 MMT of soft wheat between Jan. 1 and April 30, 2024, state grains agency ONICL said. Morocco launched an import program for 2023-24 covering up to 2.5 MMT for July to September, followed by a second round for October to December allowing up to 2 MMT. Shipments so far have lagged volumes available under the subsidy program.
CORN: March corn futures continue to face weakness despite gains in the soy and wheat markets. Bulls are looking for a bounce above initial resistance at the Nov. 13 low of $4.76 1/2 before tackling the 10-day moving average at $4.81 1/2. Support stands at the overnight low of $4.72 before the for-the-move low at $4.71, with further selling likely to target $4.65 3/4 support.
SOYBEANS: January soybean futures continued higher overnight though resistance at the 10-day moving average, currently at $13.50 1/4, stalled most buying. Bulls are seeking a daily close above this mark before tackling downtrend line resistance at $13.66. Bears are looking to tackle support at $13.41 1/2 before challenging the 200-day moving average at $13.33.
WHEAT: March SRW futures saw continued corrective buying overnight though were still within Monday’s range. The 10-day moving average, currently at $5.77 1/4, capped most gains overnight, while bulls are eyeing a break above Monday’s high of $5.82 before tackling firmer resistance at $5.85 1/2. Bears are looking to break support at $5.70 1/2 before $5.61, then the contract low of $5.56 1/4.
CATTLE: Higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a firmer tone following Tuesday’s price surge. Following a limit-up close in January feeder cattle, daily trading limits will be expanded to $12.25 for today’s session, while live cattle limits will be expanded to $10.00. Active followthrough buying today would suggest Monday’s trade was capitulation and a low is likely in place. Meanwhile, cash cattle trade continued in a weaker tone from last week, with trade taking place under the $175.00 mark on Tuesday. Wholesale beef prices ended mixed, with Choice rising 92 cents to $298.17 while Select fell $1.45 to $266.35.
HOGS: Lean hog futures are expected to open lower as cash fundamentals continue to face seasonal weakness. The CME lean hog index is down another 67 cents to $71.66 (as of Nov. 27), extending the seasonal price decline. As expected, pork cutout gave up most of Monday’s gains, falling $3.95 to $84.80, led by a $16.11 drop in primal bellies. Price action is likely to continue recent volatility as traders are seemingly uncertain about when a seasonal low in cash prices will take place, evidenced by the volatility in February futures trading on either side of the December contract through the first two days this week.
