Ahead of the Open | November 30, 2021
GRAIN CALLS
Corn: 6 to 7 cents lower.
Soybeans: 12 to 14 cents lower.
Wheat: 10 to 14 cents lower.
GENERAL COMMENTS: Wheat and soybean futures sank to the lowest levels in over two weeks overnight and corn also dropped as heightened concern over the Omicron variant of Covid pressured global markets. Malyasian palm oil fell to an eight-week low, Nymex crude oil fell near three-month lows and U.S. stocks were poised for a weaker open. The U.S. dollar index is more than 650 points lower this morning.
USDA reported a sale of 132,000 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year.
Consultant Dr. Michael Cordonnier cut his Brazilian corn crop estimate by 1 MMT to 117 MMT, citing dry conditions in the far southern state of Rio Grande do Sul and extended forecasts calling for below-normal precipitation in southern Brazil. Cordonnier left his Brazilian soybean crop estimate at 144 MMT and kept Argentine corn and soybean estimates at 53 MMT and 50 MMT, respectively.
Large speculators boosted their net long position in corn futures and options for the third week in the past four, to the highest since early May, based on figures as of Nov. 23 from the Commodity Futures Trading Commission. In soybeans, large speculators’ net long rose to the highest since early October.
Brazil’s National Energy Policy Council (CNPE) will maintain a 10% biodiesel blend in diesel for 2022, citing “the interests of the consumer in terms of price, quality and supply of products.” Earlier this year, Brazil cut its biodiesel blend rate from 13%.
December grain and soy contracts started the delivery period today. Deliveries totaled two contracts for corn, 1,054 contracts for SRW wheat, one contract for soymeal and 106 contracts for soyoil.
CORN: March corn fell as low as $5.72 1/4 overnight, just above last week’s low at $5.72. Bullish traders still hold a near-term technical advantage with the market in a six-week uptrend, but momentum has faded as prices traded sideways in recent sessions. Key support is seen at $5.57 1/2, the November low.
SOYBEANS: January soybeans fell as low as $12.26 overnight, the lowest since $12.20 1/2 on Nov. 12, and have moved back below a downtrend line drawn from the May and June highs, indicating technical strength from an upside breakout earlier this month has largely faded.
WHEAT: March SRW wheat overnight fell as low as $8.02 1/2, the lowest intraday price since $7.90 1/4 on Nov. 10. Late yesterday, USDA reported 44% of the winter wheat crop in “good” or “excellent” as of Nov. 29, unchanged from the previous week, but slightly better than trade expectations for 43%. Acres rated “poor” or “very poor” rose to 23% from 22%. When USDA’s final crop condition ratings of the fall are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 5.2 points to 324.4 and the SRW crop improved 5.5 points to 361.3. The HRW rating is the lowest of the fall and 7.8 points below the five-year-average. The SRW rating is 3.9 points below the initial level and 13.5 points under the five-year average.
LIVESTOCK CALLS
CATTLE: Steady-firm
HOGS: Steady-weak
CATTLE: Live cattle futures’ technical posture weakened yesterday after the market underwent heavy corrective selling following a contract high. Additionally, the cash cattle market strength may take a pause after meatpackers aggressively bought animals during November. Some of last week’s purchases were for delayed delivery and packers have access to fresh contracted supplies for December. Last week’s cash cattle price averaged $138.17, up 3.8% for the eighth consecutive weekly gain and the highest weekly average since June 2017. Choice boxed beef prices fell $2.43 yesterday to an average of $277.58 on light movement of 82 loads.
HOGS: Lean hog futures may face further pressure from slumping cash fundamentals. The CME lean hog index is down another $1.03 to $70.60, the lowest since early February and about $1.80 above where December futures ended on Monday. Stronger wholesale pork prices suggest demand may be improving. Pork cutout values rose $3.70 yesterday to $87.71, led by a gain of over $7.00 in hams. Movement was strong at 335 loads. The national direct cash hog price rose 2 cents to $55.15.
