Ahead of the Open | November 9, 2021
GRAIN CALLS
Corn: 2 to 3 cents higher.
Soybeans: Steady to 1 cent higher.
Wheat: 2 to 7 cents higher.
GENERAL COMMENTS: Corn and soybean futures were slightly firmer in narrow-range overnight trading. Wheat futures rose after USDA reported little improvement in winter wheat crop ratings. Malaysian palm oil fell to a five-week low, while Nymex crude oil futures rose slightly. The U.S. dollar index is little changed.
USDA will release its Crop Production and Supply and Demand reports at 11 a.m. CT. The agency is expected to raise its U.S. corn crop estimate to 15.05 billion bu., up about 0.2% from its October forecast, based on a Reuters survey of analysts. The estimated average nationwide yield is expected to increase to 176.9 bu. per acre, up 0.4 bu. from last month. The U.S. soybean crop is expected to be hiked to a record 4.484 billion bu., up 0.8% from last month. The average U.S. soybean yield is expected to be revised to 51.9 bu. per acre from USDA’s 51.5-bu.-per-acre forecast in October. Ending soybean stocks are expected to rise 42 million bu. from last month.
For wheat, USDA is expected to cut its projection for 2021-22 global ending stocks to 276.5 MMT from its October figure of 277.2 MMT. USDA may also lower U.S. wheat exports.
Crop consultant Michael Cordonnier kept his Brazilian soybean and corn crop estimates unchanged at 144 MMT and 118 MMT, respectively, though he has a neutral to slightly higher bias for both crops given favorable growing conditions. His Argentine crop estimates remained at 50 MMT for soybeans and 53 MMT for corn, with a neutral to lower bias for soybeans. USDA is not expected to make any changes to its South American crop estimates later this morning.
Overnight, the Philippines purchased 50,000 MT of Australian feed wheat, while Japan is seeking 157,987 MT of wheat from the U.S., Canada and Australia. South Korea tendered to buy 115,000 MT of optional origin non-GMO soybeans. Tunisia tendered to purchase 100,000 MT of soft milling wheat and 75,000 MT of feed barley, both optional origin.
SOYBEANS: USDA yesterday reported U.S. soybean crop was 87% harvested as of Nov. 7, up from 79% a week earlier and near the five-year average of 88%. Progress fell short of trade expectations for the crop to be 89% harvested. Overnight, January soybean futures fell as low as $11.86 1/2, the lowest intraday price since $11.83 3/4 on March, before mildly rebounding.
WHEAT: USDA yesterday reported the winter wheat crop at 45% “good” or “excellent” condition, unchanged from the previous week. The crop was 91% planted, even with the five-year average for the date. 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 1.7 points to 327.0 and is now 16.1 points below the five-year average for early November. The SRW crop fell 1.4 points on the week to 365.2, though that’s still 2.2 points above average.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firmer
CATTLE: Live cattle futures may be poised for further upside after December futures yesterday settled at $132.10, the highest close for a nearby contract since June 2017. Cash fundamentals have strengthened, with live steers in five top feedlot areas averaging $129.23 last week, the fifth consecutive weekly increase and the highest weekly average since February 2018. Feedlots sold large numbers of cattle last week, helping them catch up on lagging marketings. Packers may not be as aggressive this week, which may temporarily slow cash price advances. Choice beef cutout values fell 89 cents yesterday to an average of $288.65, still near a five-week high. Chart levels to watch in December live cattle include yesterday’s intraday high at $132.50, also a two- month high, and the 100-day moving average around $131.20. December futures have yet to entirely fill a small gap on the daily chart created Nov. 3.
HOGS: Lean hog futures extended technical weakness yesterday but may be due for a corrective bounce on signs of small improvement in cash fundamentals. The next CME lean hog index climbed 60 cents to $79.29 today, its second consecutive daily increase after a nearly uninterrupted decline since early August. The index is still near the lowest levels since February. Otherwise, cash fundamentals remain soft, with pork cutout values falling $1.49 yesterday to $94.86 on movement of 337 loads. Carcass values on national direct markets fell 87 cents to $59.03. Market bears hold a near-term technical advantage, though a four-week downtrend on the daily bar chart was halted the past week, suggesting the market has established a near-term bottom. Chart levels to watch include last week’s high at $78.225 and the 20-day moving average around $75.90.
