Ahead of the Open | November 5, 2021
GRAIN CALLS
Corn: Steady to 2 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: Steady to 3 cents higher.
GENERAL COMMENTS: Soybean futures fell to a three-week low overnight and corn also fell in narrow-range trading. Wheat futures were steady to firmer. Malaysian palm oil futures fell to a three-week closing low, its third weekly decline in the past four. Front-month Nymex crude oil futures rose around 70 cents. The U.S. dollar index is up around 250 points after this morning’s jobs data.
The U.S. jobs market bounced back in October, as non-farm payrolls posted a stronger-than-expected increase of 531,000 while the unemployment rate fell to 4.6%, the Labor Department reported Friday. Payrolls were expected to rise about 450,000.
A shortage of nitrogen fertilizer due to soaring natural gas prices is threatening to reduce global crop yields next year, CF Industries said yesterday. European gas prices have jumped amid high demand, as economies recover from the pandemic and with below-average gas storage levels at the start of the winter heating season.
Rain in Argentina over the past week helped propel 2021-22 corn sowing and development of wheat crops, the Buenos Aires Grains Exchange said yesterday, after an earlier heat wave led to fears that the season would be hobbled by dryness.
French farmers had harvested 73% of the grain maize crop area by Nov. 1, compared with 54% a week earlier but still well behind the usual pace, farm office FranceAgriMer said today. This year's harvest was showing an 11-day lag compared with the average progress of the past five years.
Ukrainian farms have harvested 67.8 MMT of grain from 87% of its sowing area, with the yield averaging 4.91 MT per hectare, the agriculture ministry said today. The volume includes 32.3 MMT wheat, 9.6 MMT barley, 22.8 MMT corn and small volumes of other grains.
SOYBEANS: January soybeans fell as low as $12.14 3/4 overnight and are on track for a weekly loss, after ending last week at $12.49 1/2.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firm
CATTLE: Live cattle faded in late trading yesterday but are still on track for a weekly gain. While cash cattle strengthened again this week, packers’ reluctance to further boost bids has created a standoff with feedlots that may translate into pressure on futures. Live steers in five top feedlot areas yesterday averaged $128.10, up from last week's $126.29 average, USDA reported. Some trade at $129.00 was reported yesterday in Nebraska. Choice beef cutout values rose $1.73 to $290.22, the highest in nearly five weeks. Movement totaled 147 loads. December live cattle fell $1.025 yesterday to $130.625, up from $129.275 at the end of last week. Chart levels to watch in December futures include yesterday’s high at $132.40, also a two-month high, and the 100-day moving average around $131.20. December futures have yet to entirely fill a small gap in the daily chart created Nov. 3.
HOGS: Lean hog futures may see carryover technical strength from yesterday’s sharply higher close, driven partly by robust export sales, and beliefs the market has established a near-term bottom. Pork cutout values fell $2.75 yesterday to $97.69 but are still up from $96.52 at the end of last week. Movement was strong at 418 loads. Other cash indicators remain weak, with the CME Lean Hog Index at the lowest levels since late February. National direct carcasses fell 86 cents yesterday to $59.82. Hog slaughter so far this week lagged last week, at an estimated 1.901 million head through today, down 1.0% from the same period last week and down 2.8% from the same period in 2020. December lean hog futures rose $1.925 yesterday to $77.875, up from $76.075 at the end of last week and the highest closing price since $78.75 on Oct. 18. Chart levels to watch include a gap between the Nov. 3 high at $76.05 and yesterday’s low at $77.00, along with the 200-day moving average around $78.70.
