Corn: Steady to mixed
Soybeans: Down 2 to 4 cents
Wheat: Steady to up 3 cents.
Grain and livestock markets will observe abbreviated trading schedules today ahead of Wednesday’s Christmas holiday, with grains closing at 12:05 p.m. CT and livestock at 12:15 p.m. CT. Government offices are closed today and Wednesday. Pro Farmer wishes you and your family a very Merry Christmas.
GENERAL COMMENTS: Soybeans are seen lower after rising to a six-week high on Monday but failing to hold much of the early gains. Corn is little changed but leaning lower after failing to hold the gain above the 100-day moving average. Wheat is firm, bouncing back from small losses Monday. More choppy and light trading will continue today.
The corn and soybean markets are pressured by falling concerns about any real weather problems developing in South America that would hurt production outlook. The South American weather forecast for Brazil has rainfall for much of the region over the next the next 6- to 10-day outlook. The Argentine weather forecast has 85% coverage over the growing the regions over the next 10 days. Most South American crop conditions are good or improving and long-term models still showing little threat from hot, dry weather.
Meanwhile, Argentine Agriculture Minister Luis Basterra has started talking with farmers about the possibility of applying lower grains export taxes to growers located farther from ports, a spokesman for the ministry told Reuters on Tuesday. "It's a possibility that will continue to be discussed in concrete terms between the government and the farming organizations that met with the minister yesterday," an Agriculture Ministry spokesman told Reuters by telephone. The new government inaugurated two weeks ago, has signed a law raising the tax on soybean exports to 33% from about 25%, while international shipments of corn and wheat are taxed at 15%, up from about 7% previously.
China and the United States struck a so called "Phase 1" trade deal that includes a commitment by Beijing to increase purchases of U.S. agricultural products. China's top agriculture consultancy said last week that the country will make good on a pledge to buy more than $40 billion of American farm goods. Traders are waiting for more evidence of that buying.
The U.S. Department of Agriculture’s daily export sales reporting service did not report any new large sales for Monday. Yesterday, the USDA’s daily service said exporters sold 126,000 metric tons of soybeans for delivery to China during the 2019-20 marketing year. The lack of any new sales will weigh on the Soybean market.
Corn: Futures are expected to be quiet today. China's customs said on Tuesday that it has allowed imports of Distillers' dried grains (DDGs) from Bulgaria. The trade move, effective from Tuesday, comes as China seeks to diversify import origins of feed ingredients amid trade tensions with the United States. One thousand tons of Kazakh corns were exported to China in 32 train containers through the Khorgos dry port Monday, Xinhua reported Ibragim Manabaev, general director of the KTZE-Khorgos Gateway saying. "It is the first time that Kazakh corns are delivered to China through container wagons, a key step in the development of the China-Kazakhstan trade in agricultural products," said Manabaev. Kazakhstan exported agricultural products worth 258 million U.S. dollars to China in 2018, a year-on-year increase of 30.4 percent.
Soybeans: March soybeans touched the highest since Nov. 8 on Monday and closed 4 ½ cents below the session high, leaving behind a selling tail and key overhead resistance at $9.46 ¾. European Union soybean imports in the 2019-20 season that started on July 1 reached 6.6 million metric tons (MMT) by Dec. 22. That’s down 2% from the volume cleared by Dec. 16 last year. EU soymeal imports had reached 9.3 MMT, up 15% versus the year-earlier period.
Wheat: Futures are holding a firm tone but waiting for more evidence of improving dexport demand, especially from China. Export prices for Russian wheat rose for a sixth straight week last week due to a stronger ruble against the dollar and demand ahead of Russia's New Year holiday. Russian state-controlled grain trader United Grain Company has drafted a new strategy aimed at increasing its own grain purchases and trade to 8 MMT a year by 2024, Russian daily the Kommersant reported on Monday. Morocco will suspend customs duty on soft wheat from Jan. 2 to April 30 to ensure regular supplies and stable prices in the domestic market, according to a draft decree seen by Reuters on Tuesday. The suspension of the 35% customs duty will be officially announced after a government meeting on Thursday.
Cattle: Steady to firm
Cattle: Futures likely to open steady to firm after beef prices rose Monday. Choice gained $1.87 and Select jumped $3.61. USDA’s monthly Cold Storage Report on Monday reflected strong demand for U.S. beef, with frozen beef stocks sliding 7% from year-ag levels as of Nov. 30. That could be mildly supportive for cattle futures, though December live cattle hold a slight premium to last week’s average cash price of $120.36, which likely will limit buying. Cash cattle trade this week and next may be limited, as packers wait to reassess slaughter needs after the holidays.
Hogs: Market is likely to be pressured after Monday’s Quarterly Hogs & Pigs Report reflected a bit more expansion than traders anticipated. Market hog inventories signal slaughter will run about 4.6% above year-ago over the coming weeks before easing. Frozen pork stocks were reported at 574.860 million lbs. as of Nov. 30, a 13% surge from year-ago levels and a 6% dip from the end of October. Chinese buying of U.S. pork has not yet been strong enough to offset expansion in the industry. But buying is expected to pick up in 2020 as Chinese supplies in cold storage dwindle and a Phase 1 trade deal takes effect. Belly stocks surged 40% from year-ago levels last month, with loins also up an eye-catching 43% from November 2018 levels. African swine fever has been detected in pigs being illegally transported in China's southwestern Sichuan province, the agriculture ministry said on Tuesday. Local authorities have already culled all the hogs and disinfected the trucks, and the drivers have been handed over to the police, the ministry said.