GRAIN CALLS
Corn: 3 to 7 cents lower
Soybeans: 11 to 15 cents lower
Wheat: 2 cents lower to 2 cents higher
GENERAL COMMENTS:
Global stock markets are under significant selling pressure today, with U.S. stock indexes set to open solidly down, as Wall Street is getting nervous about high stock valuations and an artificial intelligence stock bubble. Wall Street chief executives said investors should brace for a stock market drop of more than 10% in the next 12 to 24 months, and such a correction may be a positive development, reported Bloomberg today. Corporate earnings are strong but “what’s challenging are valuations,” said Mike Gitlin, president and chief executive officer of Capital Group, during a financial summit by the Hong Kong Monetary Authority today. On whether stocks are cheap, fair or fully valued, Gitlin said most people “would say we’re somewhere between fair and full, but I don’t think a lot of people would say we’re between cheap and fair.” The same goes for credit spreads, Gitlin added. Bond traders have been extra worried about private credit deals that may not have solid financial footing. Gitlin’s views were echoed by Morgan Stanley CEO Ted Pick and Goldman Sachs Group Inc.’s David Solomon, who also see the possibility of a significant selloff in the coming period and said pullbacks are a normal feature of market cycles. In another worrisome sign, Palantir Technologies Inc. raised its annual revenue outlook to $4.4 billion and outpaced analyst estimates for third-quarter sales. The company’s revenue increased 63% to $1.18 billion in the period ended in September, with profit, excluding some items, at 21 cents a share. Yet, Palantir’s shares fell about 3% in extended trading due to concerns about the company’s lofty valuation after a record run-up, despite the company’s strong quarterly results.
Australia is set to ship its first canola to China in five years, with a vessel hauling a trial cargo of the oilseed expected to depart for Qingdao in less than a week, Bloomberg reported. A bulk carrier will take on a cargo of about 60,000 tons of canola in Esperance, Western Australia, and then head for the port of Qingdao in China’s northeast. At least three trial cargoes of the oilseed have been booked by China for the fourth quarter, marking the first shipments since Australia was shut out of the China market in 2020 over phytosanitary concerns. According to the Australian agriculture department’s website, the canola trial is underway, with a view to supplying cargoes containing less than 1% of “non-seed material.” The trial follows a souring in relations between China and Canada, the oilseed’s top exporter. Prior to their dispute, almost all of the 6.39 million tons of canola imported by China in 2024 came from Canada.
JBS SA, the world’s largest meatpacker, has agreed to pay $1.1 million to settle a lawsuit by the state of New York over allegations the company misled the public about reducing the impact of its operations on the environment. As part of the settlement, JBS agreed to revise language related to the company’s environmental marketing and produce annual reports to the New York Attorney General’s office. The $1.1 million payment will be made to Cornell University’s College of Agriculture and Life Sciences’ New York Soil Health and Resiliency Program for the purpose of “supporting climate-smart agriculture.” In a statement, JBS said the settlement “does not reflect an admission of wrongdoing.” The company’s USA unit said it “remains driven to advance sustainable agriculture. We maintain a continued focus on investing in practical solutions that strengthen the resilience of the food system,” said JBS and as reported by Bloomberg.
CORN: December corn saw minor gains in yesterday’s session, but then shifted lower overnight. A strong dollar is one of main the limiting factors for buying interest in corn, and strong losses in soybeans are not helping either. The 10-day moving average of $4.29 1/4 offers initial support, with firmer support in the $4.20 area and the 100-day moving average. Resistance is encountered at the $4.36 1/2 mark. Corn bounced lower off that mark last week, and saw resistance at $4.35 in yesterday’s session as well.
SOYBEANS: After closing at a 16-month high yesterday, January soybeans have wiped out most of yesterday’s gains in the overnight session. Soybeans had traded in to technically overbought territory, encouraging chart-based speculators interest in selling. The contract finds initial support at last week’s close of $11.15 1/4, and firmer support at the $11.00 mark. Key resistance will remain at pushing above the $11.25 mark again.
WHEAT: December SRW made solid gains yesterday. Rumors of Chinese interest in U.S. wheat likely helped some, but USDA’s Monday report showing continued strong wheat export inspections is also a more firm bullish sign for wheat. Initial support is seen at the 100-day moving average of $5.36 1/4, with lower support on the 10-day average of $5.26 1/2. Resistance at the psychological $5.50 mark is likely to persist, but continued export demand is a good sign it may be tested again today.
LIVESTOCK CALLS
CATTLE: Choppy
HOGS: Choppy/lower
CATTLE: Cattle markets saw positive gains yesterday and are hoping to stabilize after a sharp sell-off over the last two weeks. While plans to increase the supply of beef have been announced, beef supplies remain tight in the near-term and are likely helping to offer some support for prices. USDA reported an average price of $230.86 for cash cattle trade last week. Cash trade has shown some weakening, but not quite to the levels that the futures market has displayed as of late. Choice cut-out on Monday was $379.25, up $1.12 from the previous report.
HOGS: December hogs saw selling pressure remain firm to start the week. Continually weakening cash prices are making it difficult for buying interest to pick up and more solid support to establish. The latest CME lean hog index is down another 34 cents at $91.19, and today’s projected cash hog index is down 21 cents to $90.98. Pork cutout on Monday dropped 30 cents from the previous report and is currently $101.65.