Ahead of the Open | January 20, 2022

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GRAIN CALLS

Corn: 1 to 2 cents lower.

Soybeans: 3 to 5 cents higher.

Wheat: HRW and SRW 2 to 5 cents lower, spring wheat 1 to 2 cents higher.

GENERAL COMMENTS: Soybean futures extended yesterday’s rally to reach the highest levels in a week overnight, while corn and winter wheat futures pulled back from strong gains the first two days this week. Malaysian palm oil futures hit an all-time high on tight supplies and Indonesia’s plan to restrict exports of the edible oil. Nymex crude oil fell from yesterday’s seven-year highs. U.S. stock index futures are up slightly, while the U.S. dollar index is near unchanged this morning.

USDA’s weekly export sales report will released tomorrow, a day later than usual, due to the federal holiday for Martin Luther King Jr. Day on Monday.

Heat and dryness remain a concern for key crop areas of South America. Much of Brazil will see a mix of erratic rain and sunshine through the end of next week, World Weather Inc. said today. “Additional field improvements for late-season soybean development, maturation and harvesting are expected in the wetter areas of the north while rain in the south will not likely reach into the driest areas until late next week,” the forecaster said.

Argentine farmers have sold 37.5 MMT of soybeans from the 2020-21 season so far, including 261,200 MT in the seven days to Jan. 12, the country’s agriculture ministry said. The sales pace was behind the previous season. At this time last year, sales of 38.6 MMT of soybeans had been registered.

China’s soybean imports in December from the U.S. almost doubled compared to the previous month, customs data showed, as more cargoes arrived after delays due to Hurricane Ida. China imported 6.09 MMT U.S. soybeans in December, up 68% from 3.63 MMT in November. The figures were also up 4% from 5.84 MMT China bought from the U.S. in the same month a year earlier.

Of the 96.5 MMT of soybeans China imported in 2021, 32.3 MMT came from the U.S., while 58.2 MMT originated from Brazil. China’s soybean imports from the U.S. rose 25% last year, while Brazilian shipments declined 9.5% from 2020.

Taiwan bought 49,395 MT of U.S. milling wheat. Japan purchased 72,351 MT of milling wheat in its weekly tender, including 50,747 MMT from the U.S. and 21,604 MT from Canada.

 

CORN: March corn futures retreated overnight from yesterday’s jump to three-week highs, though remained within Wednesday’s range. The market may look to wheat and/or soybeans for direction. March futures rose 11 cents yesterday to $6.10 1/2, the contract’s highest settlement since $6.14 3/4 on Dec. 27. Resistance is at yesterday’s high at $6.14 1/2, while the 10- and 20-day moving averages, both around $6.01 1/2, provide initial support.

SOYBEANS: March soybeans overnight rose as high as $13.97 1/2, the contract’s highest intraday price since $13.99 on Jan. 13. The lead contract surged 30 cents yesterday to $13.91 1/4. Resistance is seen at the psychologically important $14.00 level, while support is seen at the 20-day moving average around $13.73 1/4.

WHEAT: Winter wheat futures finished lower overnight after fading from initial overnight gains. March SRW wheat rose as high as $8.02 3/4, the contract’s highest intraday price since $8.08 on Dec. 28, before retreating. March HRW futures reached $8.06 1/2, the highest since Jan. 5, before sinking to mild losses.

 

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-mixed

CATTLE: Live cattle futures may extend yesterday’s gains on signs the cash market is establishing a bottom after dropping for over a month. Cash sources reported light to moderate cash cattle trade so far this week at roughly steady prices compared with last week. Live steers so far this week averaged $136.75, slightly firmer compared to last week’s average of $136.61, USDA reported yesterday. Futures are also supported by wholesale beef strength and indications slaughter rates are returning to normal following Covid-related slowdowns earlier this month. Choice cutout values rose $2.11 yesterday to $291.60, the highest daily average since Oct. 1. Movement totaled 115 loads. April live cattle rose $1.50 yesterday to $143.35, the highest closing price since $144.20 on Jan. 3.

HOGS: Strengthening cash fundamentals lifted lean hog futures to a seven-month high yesterday, but the market is nearing overbought levels and may face some corrective profit-taking pressure. Pork cutout values jumped $8.26 yesterday to $95.47, led by a gain of over $30 in primal hams. Movement totaled 387 loads. Cutout values have reached the highest since Nov. 11, suggesting retail demand has improved this year while supplies tightened, in part due to Covid-related slaughter plant slowdowns. April lean hog futures rallied $2.075 yesterday to $91.35, the contract’s highest close since $91.825 on June 10.

 

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