GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 3 to 5 cents lower.
Wheat: Winter wheat steady to 2 cents lower; HRS 1 to 3 cents higher.
GENERAL COMMENTS: Soybeans continue to lead weakness as have been an anchor on corn and wheat prices over the past couple sessions. Meanwhile, each did see an uptick in buying pressure going into the break. Outside markets were quiet overnight as both front-month crude oil futures and the U.S. dollar index are trading near unchanged.
USDA’s December supply and demand report comes out this morning at 11:00 a.m. CST. Grain futures trading could become more volatile after the data is released. Analysts surveyed by Bloomberg, on average, look for the agency to lower its estimate of U.S. corn ending stocks by 8.2 million bushels from its November figure, to 2.146 billion bushels. The analysts look for USDA to peg U.S. soybean ending stocks up 16 million bushels, to 306.1 million bushels. And analysts, on average, look for USDA to show U.S. wheat stocks down 7.2 million bushels at 893.8 million bushels.
The Federal Reserve’s Open Market Committee (FOMC) begins its monetary policy meeting this morning, with the meeting ending Wednesday afternoon with an FOMC statement and then a press conference from Fed Chair Jerome Powell. Markets are pricing in a 90% chance of a 0.25% U.S. interest rate cut at from the Fed this week. However, market expectations are now growing that the FOMC statement and Fed Chairman Powell’s comments at his press conference may lean more hawkish on U.S. monetary policy—namely due to worries about sticky inflation. News Monday that U.S. producer inflation reports for October and November that were expected to be released later this week have now been delayed until January threw more uncertainty into the present U.S. inflation situation.
President Trump on Monday signaled he could impose new tariffs on agricultural products, including Canadian fertilizer and Indian rice. Trump spoke Monday at a White House event to announce new aid for farmers, some of whom said cheaper imports are making it difficult for their products to compete in the marketplace. Trump said he would “take care” of alleged dumping of Indian rice into the U.S. and suggested targeting fertilizer imported from Canada to boost domestic production, Bloomberg reported. Some farmers have blamed imports for falling U.S. rice prices, saying countries such as India, Vietnam and Thailand are undercutting the U.S. rice crops. “They shouldn’t be dumping,” Trump said. “I mean, I heard that, I heard that from others. You can’t do that.” Trump similarly suggested he could target fertilizer imported from Canada to boost domestic production. “A lot of it does come in from Canada, and so we’ll end up putting very severe tariffs on that, if we have to, because that’s the way you want to bolster here,” Trump said. “And we can do it here. We can all do that here.”
CORN: March corn futures struggled to overcome the 200-day moving average overnight, which remains initial resistance at $4.46 3/4. Support comes in at $4.43 3/4, the 40-day moving average, on a push lower.
SOYBEANS: January soybeans continue to see relative weakness. Support comes in at $10.79 1/4 on persistent selling. Resistance stems from the psychological $11.00 mark.
WHEAT: March SRW futures are near the lower end of the recent sideways range. Support persists at $5.30 while bulls are looking to topple resistance at $5.40 on a bounce.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/higher.
CATTLE: Live cattle and feeders are expected to open with a mostly firmer tone as technical support continues to underpin futures. Bulls defended 100-day moving average support in February futures in Monday’s correction lower, which was largely due to technically overbought conditions. Cash fundamentals remain supportive of higher futures, as the cash cattle market reversed higher last week, with last week’s cash cattle average coming in at $221.21, up from the previous week at $211.53. Meanwhile, beef cutout continues to flounder, as choice slid 30 cents to $360.90 Monday while select rose $1.21 to $348.60.
HOGS: Lean hog futures are expected to open with a mostly firmer tone, though technical resistance could limit gains after the open. The 200-day moving average looms over the market at $82.85 which could continue to limit the upside, though a flattening CME lean hog index could encourage bulls that the index hit an early seasonal low. The index is up 3 cents to $81.84 as of Dec. 5, marking an end to the string of seasonal daily declines. Pork cutout slid 88 cents to $95.51 Monday, led by losses in picnics and bellies.